Britain's biggest council says it is facing 'the most challenging period its history' after announcing a further round of huge cuts in its workforce.

Birmingham City Council has confirmed it will cut almost 1,100 jobs next year in a the face of further reductions in Government funding and increasing demand for services.

This will come on top of 12,000 jobs – more than half the council's former workforce – being axed since 2010.

The job losses are part of a four-year plan rubber-stamped yesterday which includes a 4.99 per cent increase in council tax from April.

Other measures include dimming street lights, increasing bulky waste and garden waste fees and reducing fly-tipping enforcement resources.

The Labour-run authority will make £46m worth of cuts in the 12 months from April, rising to £85m over the next four years. It expects a further 500 jobs to go by 2022/23.

The budget was passed as hopes rose for an end to the series of one day strikes by refuse collectors.

Unite the union suspended its action yesterday (Tuesday) pending further talks at ACAS over disputed payments made to members of a rival union who worked through a previous strike.

But if the talks fail the council says it will go ahead with a legal challenge to the industrial action tomorrow (Thursday).

The council will argue that the grounds for the strike are unwarranted because the payments to GMB union members was because they were not consulted over the settlement of the strike last year.

Council leader Ian Ward Council leader Ian Ward blamed 'brutal' government cuts of £700m since 2010 for the latest job losses.

But he also claimed there were 'reasons for optimism' including improvements in children's services, major housing developments and forthcoming projects such as HS2 and the Commonwealth Games in 2022.

He said: 'The budget is not simply a response to our financial challenges, it is a forward looking financial plan to transform the way we work, change the way services are delivered, and look towards new opportunities to improve quality of life for citizens in the long-term.'