Around 41% of local authorities in England are shunning the government's offer of extra money in return for pegging council tax rates.
Last year, around 85% took up the offer but now that number is set to fall dramatically, according to figures compiled by the Chartered Institute of Public Finance and Accountancy (Cipfa).
With just over half of billing authorities already confirming their intentions, it found that 41% intended to forego the government money - equivalent to a 1% rise in cash terms - and push up the tax for 2013/14.
Eric Pickles says the government has worked to freeze council tax The average rise is expected to be 1.1% - an extra £11.74 for a typical Band D property.
There are significant regional variations, with an average 1.2% rise due across Yorkshire and Humber - adding £16.30 to a Band D property bill - while in Greater London it is just 0.1%.
Some town halls fear that unless they impose modest rises this year they will be forced into more dramatic increases in future when there is no Whitehall cash to soften the blow.
Cipfa's Ian Carruthers said: "As the pressures from this period of unprecedented austerity intensify, all councils are having to strike an increasingly difficult balance between protecting hard-pressed taxpayers and maintaining local services."
Communities Secretary Eric Pickles said: "Council tax more than doubled under Labour. But this Government has worked to freeze council tax for three years.
"This survey confirms that council tax will effectively be frozen again this year, with an average change across England of just a mere 0.8%. This is a tax cut in real terms."
Mr Pickles has ordered any council which seeks a rise of 2% or more to put it to a local referendum and has told those considering rises just short of that they are "cheating" taxpayers.
A Local Government Association spokesman said: "This has been a tricky decision for councils.
"Collectively local authorities are facing a 33% cut in funding from government at the same time as the cost of providing services like adult social care is climbing through the roof.
"The council tax grant from government is very small when set against those pressures and it lasts just two years with no certainty beyond that.
"Ultimately councils have to take a long-term view. Some have clearly decided that increasing council tax is one way of meeting current costs and alleviating pressure in the longer term.
"Councils are fully accountable to their electorates for these decisions."
The Pope waves from his papamobile at the end of his last weekly audience
Grillo: His protest group M5S appears the real winner
Bersani: Narrow victory for his leftist coalition in the lower chamber
Berlusconi: Doing better in the Senate
Lord Rennard strenuously denies the claims
Mr Clegg said Danny Alexander put the concerns to Lord Rennard
Christoph Waltz won the first award of the night
Shirley Bassey wowed the audience in the theatre
The cast of Les Mis took to the stage
Daniel Ubani caused the death of 70-year-old David Gray (pictured)
Moody's said it did not expect Britain's slow recovery to change
Oscar Pistorius claims the death was a tragic mistake
Miss Steenkamp's funeral was held in Port Elizabeth
Oscar Pistorius broke down in tears during his last court appearance
Reeva Steenkamp and Oscar Pistorius had been dating since November
Oscar Pistorius is charged with murdering Reeva Steenkamp
A police officer holds a gun taken from Pistorius' home
The meteor lit up the sky
The meteorite was travelling at up to 40,000mph
More than 1,000 people have been injured
Viktor was injured by a shock wave
The crash site of a piece of meteor (Pic: Chelyabinsk MVD)
The meteor hit Chelyabinsk
Pistorius reached the 400m semi-finals at the London 2012 Olympics
Miss Steenkamp was due to speak at a Johannesburg school on Thursday
The shooting took place at Pistorius' home at Silver Woods country estate
Miss Steenkamp has been described as a 'talented and bright young girl'
Pistorius lives a short distance from the centre of Pretoria
A billboard advert featuring Pistorius is removed in South Africa
Michael Le Vell was first questioned over the child sex allegations in 2011
Police and FSA officials raided the Farmbox Meats site in northwest Wales
Mr Obama prepares for his State of the Union address
The President greets workers dealing with the aftermath of superstorm Sandy
Michelle Obama arrives to hear her husband give his address
Hadiya Pendleton: teenager shot dead after performing at the inauguration