Scottish local authorities have scrapped plans to raise council tax in the face of government penalties.

Moray Council said last month that it would be forced to introduce a tax hike to meet an £11m budget deficit.

It would have been the first local authority to do so since the Scottish Government introduced a freeze in 2007.

The council now believes the £5m a tax increase would have generated would be wiped out by government penalties.

Highland Council has also abandoned talks over a tax rise as a result of the sanctions, which Cosla branded "draconian".

The authority was considering a possible 5% increase in council tax but leader Margaret Davidson said this option "has been taken away from us" by the Scottish Government.

She said: "We have been informed, if we raise council tax, we will be fined not just the 3% we expected but also other sanctions will be applied around teacher numbers and funding for social care. Cumulatively, that would mean a fine of £18m. Hence we cannot responsibly raise council tax.

"In common with other local authorities across Scotland, we feel disappointed and powerless as a result of the Scottish Government's stance."

Moray Council had identified £1.9m worth of savings in addition to the £5m it expected to raise through council tax and planned to use £5m of its cash reserves to make up the rest of the deficit.

The move would have seen council tax bills rise by between £136 and £408 for Moray residents.

But the Scottish Government says its freeze saves the average Band D household £1200 a year.

A Scottish Government spokesman said: "While the Scottish Government awaits final confirmation from Moray Council, the indication they will sign up to the council-tax freeze is welcome.

"The Scottish Government's funding proposals deliver a strong but challenging financial settlement for local government despite cuts to the central budget by the UK Government.

"It is a deal that will see an additional £250m invested in social care, it will help councils deliver the living wage giving 40,000 people a pay rise, it will freeze council tax for a ninth consecutive year and it protects the pupil-teacher ratio, helping improve attainment.

"Overall, as a percentage of local authorities' total estimated revenue expenditure in 2016-17, the reduction in local authority budgets is around 2%."