Cornwall Council has accepted a controversial Government grant which will see its share of the council tax bill frozen for the next 12 months.

The decision was made at a full meeting yesterday, where the council set its budget for 2012/13.

The council voted to approve a budget of £451.7 million and agreed to accept the Government's offer of funds equivalent of a 2.5 per cent council tax rise if it freezes bills in April.

This means the authority's element of council tax for an average Band D property will be held at the current level of £1,244 for the next financial year.

Despite the council's decision, council tax bills will still rise. Last week Devon and Cornwall Police Authority decided to decline a similar offer of a grant from the Government and to raise the police precept in the council tax bill by two per cent – equivalent to a rise of six pence per week for a Band D property.

Introducing the budget yesterday, Conservative Council Leader Alec Robertson said the decision over accepting the one-off grant was one of the key issues in this year's budget.

"We're well aware of the difficulties people in Cornwall are facing in paying bills," he said.

The freeze will ease the burden on tax payers this year, but there are concerns that, without a similar injection next year, the council will be left with a gap to fill in 2013/2014.

Coun Robertson said he was confident the council had sufficient reserves to balance the budget next year.

However, Councillor Dick Cole, leader of the Mebyon Kernow party, was among those opposed to accepting the grant, saying it would create a "black hole for the future". He described it as a "cynical ploy" on the part of a Government that had "slashed public spending".

He said: "It's our view that this so-called grant represents a false economy unless the Government pledges to increase public spending for future years."

Jeremy Rowe, leader of the Liberal Democrats, the main opposition group on the council, welcomed the move to accept the Government grant.

He said his party supported "elements of the budget" but still had concerns over some its content.

Extra cash has been found in this year's budget to support bus services and keep open public toilets, both of which had been threatened with cuts. The authority remains on course with its four-year plan of making £170 million worth of cuts.

However, Coun Robertson said that, because the council had made "tough choices and hard decisions" last year, it was now in a position to set a "budget for growth".

Key recommendations passed yesterday included £700,000 to fund a Cornish Bursary to encourage youngsters to stay on in learning and a £62 million housing plan to deliver 4,125 new homes within the next four years, 3,000 of which will be affordable homes to rent. An additional £7 million was found for Adult Care and Support.

A recorded vote was held over the decision to accept the Government's council tax freeze grant for 2012/13. Of those present, 94 members voted in favour, 12 voted against and six abstained.