A POSSIBLE lifeline has been held out to Medway Council by John Prescott only hours after the head of finance had written an open letter to the Deputy Prime Minister asking him to save them from bankruptcy.

Medway is to be given the power to raise extra council tax by cutting the discounts to owners of second homes.

But Cllr Alan Jarrett, Medway's finance portfolio holder, said they were taking a very close look at what was on offer.

He said: "I have a distinct feeling we have very few properties in Medway that could qualify, and it's more likely to hit private sector rented accommodation. We wouldn't want to shoot ourselves in the foot."

The Deputy Prime Minister believes that an extra £10 million could be raised by councils across the region by introducing lower relief levels on second homes. The Government estimates that there are approximately 30,000 second homes in the South East.

The Government proposes to give councils the choice of applying council tax discounts of between 10 per cent and 50 per cent for second homes.

Currently second homeowners have an automatic entitlement to a 50 per cent discount. Councils will also be able to end discounts for long term empty property.

The local authorities will retain any additional council tax raised and will be able to decide how to spend it to improve local services.

Sir Jeremy Beecham, chairman of the Local Government Association, said: "Councils will welcome local discretion to reduce the council tax discounts that are currently available for second and empty homes."

Councils will be given powers to create their own discounts and exemptions. In a further measure to bring empty homes back into use, the Government will allow councils to share limited council tax information.