Council tax bills in Kingston will rise by 1.9 per cent, after Liberal Democrats rejected Tory proposals to cut £1.1m from the budget and limit the increase to 0.8 per cent.

The budget will again leave residents with the highest council tax in London, with band D households due to pay £1,662.03 from April, a £32 increase on last year.

The package approved on Thursday night includes £1.8m to secure £300m Government funding for schools, and an extra £400,000 to repair winter damage to roads.

Resisting a “dive to the bottom” that has seen many London boroughs freeze council tax ahead of May's local elections, council leader Councillor Derek Osbourne said demand for council services had increased and income fallen during the recession.

He said: “Our priority must be to set council tax levels and the medium term budget risks at levels which are affordable, but do not threaten important local services, particularly those used by elderly, disabled, vulnerable individuals and low income families.”

The Conservative alternative budget included proposals to save £500,000 through “complete restraint on non-essential supplies and services expenditure”, and £300,00 by bringing forward planned redundancies.

Tory leader Coun Howard Jones said: “We know that to achieve these efficiencies will be hard work. We recognise the officers and executive will be hard pressed to ensure the savings sent out in our amendment. We know it would increase the budget risk."

Council finance officers warned “this would significantly increase budget risk, which is already considered to be at a high level”, and councillors rejected the amendment by 25 votes to 19.

Both parties supported the additional money for schools, equivalent to a 2.5 per cent tax rise, which will allow the council to expand primary schools and access funding for a new secondary school in the north of the borough.

Lib Dems raided the council's insurance fund, used to compensate people for accidents, to pay for £400,000 additional road repairs. Coun Osbourne said it was “entirely reasonable to use that money in a preventative rather than a post-hoc way".

The element of council tax the council is responsible for will rise by 2.5 per cent, but the overall increase was lowered by Boris Johnson's decision to freeze the £310 precept he adds to London tax bills.