Local government leaders are threatening to increase council tax bills in defiance of ministers in a bid to avoid devastating cuts to services.

Council leaders said they would consider a tax hike - the first time in nine years - after Finance Secretary John Swinney imposed swingeing cuts on their budgets.

Read more: No giveaways but no takeaways either 

Delivering his final budget before the Holyrood election yesterday, Mr Swinney promised to maintain the popular council tax freeze, which in past years has been accepted reluctantly by town halls in return for a handing town halls a multi-million pound subsidy.

The threat to tear up the deal, which came in an angry statement by the president of council umbrella body COSLA David O'Neill, was a sign of the group's fury at Mr Swinney's budget for the financial year starting in April.

Read more: Herald View 

Mr O'Neill accused Mr Swinney of axing 15,000 jobs across Scotland at a stroke and said a further council tax freeze was "unacceptable".

"To say that they have agreed a freeze for the ninth successive year is simply inaccurate," he warned.

Councils said next year's budgets had been cut by £500million. The Chartered Institute of Public Finance and Accountancy said the real terms reduction amounted to more than seven per cent.

Read more: Iain Macwhirter  

In contrast, Mr Swinney announced 6.5 per cent increase in NHS budgets, taking total spending to nearly £13billion.

Half the extra cash will be spent on social care for elderly people as part of an ongoing effort to reduce unnecessary demand for frontline hospital services.

The winners and losers emerged as Mr Swinney delivered his ninth budget as Finance Secretary.

The spending plans for the financial year starting in April were widely seen as the most significant since devolution in 1999 as, for the first time, MSPs were required to set a Scottish rate of income tax.

As expected, Mr Swinney resisted the temptation to use the new power to deviate from existing UK rates, telling MSPs he was unwilling to "inflict an additional burden" on basic rate taxpayers.

He also confirmed he would freeze council tax bills for a ninth successive year.

Mr Swinney announced two tax increases, hitting larger companies with a £130million rates bill to plug a shortfall in expected revenues.

He also hiked LBTT - the stamp duty replacement introduced earlier this year - for second home purchases, in a move that mirrored George Osborne's budget changes last month.

The increase, equivalent to three per cent of the property's value, will raise between £17million and £29million.

Despite pre-budget warnings of hard choices, popular universal entitlements including free university tuition, free prescriptions, free bus travel for pensioners and free school meals for younger primary school pupils were untouched.

In a set piece speech last just over half an hour, Mr Swinney said he wanted to "continue to help family budgets".

He described the budget as "a Scottish alternative to austerity" but it was dismissed by Scottish Labour, which accused him of failing to use the new tax powers to combat the Chancellor's spending cuts more effectively.

The Scottish Conservatives praised the budget for the same reason.

David Mundell, the Secretary of State for Scotland, said: "The fact that John Swinney has decided to go with the broad thrust of George Osborne’s spending plans shows he recognises that the difficult decisions the UK Government has made are right and necessary."

Mr Swinney outlined spending of £30.3billion in 2016/17.

The budget he controls is one per cent smaller than this year's, though deeper cuts will follow in the years up to 2019/20.

Among other measures he announced, the Scottish Government will increase spending on affordable housing by £90million, taking the total to £690million, as a first step towards building 50,000 properties by the end of the decade.

New long-term infrastructure plans included a by-pass for Dalry in Ayrshire, two new island ferries and improvements to Scotland's most famous roundabout, the notoriously congested Haudagin junction in Aberdeen.

The Finance Secretary also protected budgets for schools and colleges and earmarked funds to expand early learning and childcare.

Leaders at Cosla, the local government umbrella body, held an emergency meeting to discuss council cuts.

President, David O'Neill said: "Whatever way they spin it, this is an 'austerity' budget of straight political choice. "How else could you describe a low spend, low tax budget that will cost 15,000 council jobs."

The budget was also criticised by the Scottish Retail Consortium, whose members face increased rates bills.

The body welcomed a pledge to review the rates system but director David Lonsdale added: "It now appears that larger firms operating in Scotland will be paying more in business rates than firms operating in comparable premises down south.

"That would be a departure from the pledge to keep rates here at the very least in line with the rest of the UK, and undermines claims to have the most competitive rates regime in the UK."

Jackie Baillie, Scottish Labour's public services spokeswoman claimed Mr Swinney had chosen to "hide" deep spending cuts until after the election by refused to set out a three-year spending plan.

"This is the most important budget since devolution, delivered by a party who promised to stand up for Scotland against Tory austerity.

"But it doesn’t deliver fairer taxes, a long term plan for Scotland or an anti-austerity alternative.

"Local services like our schools, roads and care of the elderly will face massive cuts," she said.

Scottish Conservative finance spokesman Murdo Fraser welcomed the decision to stick to UK income tax rates.

Russell Gunson, director of think tank IPPR Scotland, said: "This budget is for one year, and John Swinney will need to repeat this scale of tax increase or spending cuts next year, and the years after.

"Reform of public services in Scotland looks to be high on the agenda, as John Swinney outlined.

"The cuts facing Scotland over the next five years will pose fundamental questions over the size and role of the state, and the route Scotland takes in the future."