Amid warning of service cuts and more pain to come, Cornwall Council's Cabinet has agreed to raise council tax by 1.97% for 2013/14, just under the amount that would trigger a referendum.

With a warning from outgoing chief executive Kevin Lavery of 'large cuts' and a major impact on front line services, he said councillors did not to be brains of Britain to see the problem.

The full council will formally decide the budget on February 12.

Even with the rise, the council leader Jim Currie admitted today that the Conservative-Independent administration will be leaving a £21m cash black hole and five per cent council tax rise next year.

The decision at the Conservative/ Independent ruled authority goes against statements from the Conservative party just hours before, with a press statement saying they would "continue to push for no council tax rise for third year".

The press release said Conservatives on Cornwall Council had reiterated their aim, at a meeting on Friday, that it was "a priority to push for a zero change in the Cornwall Council part of the Council tax for a third consecutive year".

In the press release Conservative group leader Fiona Ferguson said: “It is becoming more and more difficult to achieve no increase in Council tax but we also know how difficult the financial situation is for many people in Cornwall and we will continue to try to reach this goal."

When it came to a vote, Cllr Ferguson, who is also the portfolio holder for finance abstained from the final vote to increase council tax, as she didn't agree with it as she had been "on holiday".

Economy and Regeneration portfolio holder Steve Rushworth also abstained.

The move, branded as bizarre by some councillors, has led to claims that the new cabinet is in disarray.

“The Conservative led cabinet couldn’t agree among themselves about council tax benefit and they couldn’t agree about the budget,” said Cllr Jeremy Rowe, leader of the Liberal Democrat group on Cornwall Council.

“Cornish residents will rightly be asking what on earth is going on.”

Mrs Ferguson's, failed, ammendment to take money from a bursery scheme to help the poorest pupils in Cornwall access education was also slammed.

Cllr Geoff Brown, Lib Dem spokesman on education, said:“This is sheer madness. To plunder this scheme is like robbing Peter to pay Paul with the added negative matter of losing Cornwall a huge EU investment and I am delighted that Council saw fit to roundly reject it."