Members of Norfolk Police Authority face a dilemma in setting a budget for 2012/13 that will be inherited by the incoming police and crime commissioner after an election later this year.

The government has offered the authority a one-off grant equating to the amount it would make from a 3pc rise in council tax, but only if it freezes its share of the tax at last year's level.

Robin Chapman, lead finance member and vice-chairman of the authority, said: 'In effect the authority would only be able to bank the cash (amounting to approximately �1.7m) and use it to act as a cushion to ease the pace at which that overall reduction was achieved.'

Alternatively, the authority could decline the cash and increase council tax by up to 3.9pc (the permitted maximum level before triggering an automatic referendum in the county).