According to research, more than one million people were taken to court, by their local council, because of council tax debts.

Figures from the political party, Liberal Democrats, found that a total of 600,000 council tax defaulters, faced calls from bailiffs and local authorities filed for bankruptcy against 1,706 people.

Julia Goldsworthy, Liberal Democrat shadow local government minister, said: "This survey shows the devastating effect that failing to pay council tax can have on families, especially those already struggling to cope with mortgage repayments and rising bills. Just as lenders are being asked to reduce repossessions, public bodies should do everything they can to ensure that bankruptcy is only ever a last resort."

She added: "This is not a licence to avoid paying bills it is about ensuring that court appearances and bankruptcy are avoided where possible."

The Local Government Association (LGA) maintained just one per cent of council tax arrears cases ended in court or had bailiffs seizing goods and bankruptcy orders were a last resort, for individuals who had a history of non-payments.

Sir Jeremy Beecham, LGA vice chairman, also said: "Only a tiny percentage of people who receive a summons end up in court. Councils send out over twenty million bills a year and have a duty to all council taxpayers in their area. Were collection rates to dip, it would mean that council tax would have to rise for everyone simply because a few didn't pay."