Council tax is to be frozen next year and some taxpayers will get money back in their pockets as Croydon's political parties steel themselves for an election battle.

The council announced yesterday it would not hike the tax in 2014-15 and would offer a £25 rebate for people who pay their bill in full.

Those with less than £25 unpaid council tax outstanding will also see their debt written off in the plans, which form part of the council's next budget along with proposals for a two-week rent 'holiday' for council tenants.

Coun Tony Newman, leader of the Labour opposition group, dismissed the freeze as "desperate election bribe" ahead of the council polls in May, while his opposite number insisted the handout had "nothing to do with the election".

Coun Mike Fisher, council leader, said: "We recognise that these are difficult times for residents and as we now come out of the recession we know that we can offer this to give back some money to hard-pressed families in Croydon."

Under the plans, taxpayers who paid council tax in full this year will receive £25 in April.

Coupled with a 1.32 per cent cut in the Mayor of London's portion of council tax bills, the average Band D household would see their bill fall by two per cent.

The rebate would be paid for out of a £3.2m recession reserve fund stashed as insurance by the council during the financial downturn.

Coun Newman said: "This equates almost exactly to the amount that Coun Fisher took off people when he hiked the council tax last year."

"Now, in a desperate election bribe, he is giving people back their own money.

"This rebate equates to 50p a week and is money that actually the most vulnerable people in the borough won't actually receive."

The council hiked the tax 1.85 per cent last year.

But Coun Fisher said: "I am not interested in what Coun Newman has to say; I am interested in what the people of Croydon have to say. I don’t think you will find many residents saying they don't want money back."

The budget, that will go before the cabinet on February 10, will also plans to give council tenants two weeks' free rent in April - saving the average household £220.

The saving will cancel out a 4.9 per cent hike in rent recommended by the Government.