Oxford City Council's spending plans for the next financial year were finally settled after a seven-hour marathon budget meeting last night.

Residents are likely to see a three per cent increase in their council tax bills from April after the Liberal Democrats pushed for their proposal during the Town Hall meeting.

Labour had proposed a four per cent rise for each of the next three years, but that was thrown out.

A late amendment from the Independent Working Class Association to set the next three years' rise at three per cent was also defeated.

The final city council tax rise will be settled on February 26 after the county and police set their components of the annual charge.

Liberal Democrat spokesman Stephen Tall, executive member for better finances, said: "Council tax hits the poorest people in society and, as it is likely as a result of our proposal being agreed, the increase will be below inflation over the next three years."

But Labour's proposal was voted down, and the party then backed the minority-Lib Dem scheme.

Stuart Craft, leader of the IWCA, said: "It's outrageous that the Labour Party have reversed their position from a four per cent increase to a three per cent, two per cent and two per cent (over the next three years), purely to save them from having to take the reins in a deal done with the Lib Dems. What does it say about a party that has more councillors than any other party but refuses to take over the administration when handed the chance on a plate?"

Meanwhile, motorists will have to pay extra to park in the city centre car parks on Saturdays after councillors voted for higher charges under the budget.

The Green group and Labour councillors, supported by the IWCA, joined forces to rule out the Lib Dems' bid of a 50 per cent increase.

They backed an increase of 25 per cent on Saturdays and an inflation-matching rise for the rest of the week.

The time for when motorists are charged, which currently ends at 6.30pm, will also be extended to 8pm.

Park-and-ride users will also see parking rise to £1 for both day-to-day and permit users.

Jean Fooks, executive member for a cleaner city, said queues for the Westgate caused pollution and congestion and the Lib Dems wanted to reduce car fumes as much as possible.

Labour's environment spokesman John Tanner said the Lib Dems' 50 per cent parking rise was too steep and 25 per cent was an increase people could afford.

There was some good news for under-threat playgrounds, with a deal being done to put £390,000 in to repairs over the next three years.

The Lib Dems didn't account anything in their original budget, IWCA wanted to invest £40,000 in the first year and the Green Party £300,000 over three years.

The Lib Dems and the Greens then agreed on putting in £390,000.

Joe McManners, Labour city councillor for Wood Farm, said: "We wanted to invest in the play areas because there is a big funding shortfall which will result in a lot of closures.

"This will affect the most deprived estates like Wood Farm, Rose Hill and Blackbird Leys - affecting an awful lot of disadvantaged kids.

"We had to compromise and we didn't get that either and I am very upset and I know the people of my area will be too."

Ed Turner, deputy leader of the Labour group, said: "We are disappointed by the gesture politics which will see swathes of play areas closing while saving the average household only £2 per year.

"This is a false economy which will lead to more crime and worsen the service for Oxford people."

There was disappointment for the Lib Dems following political disagreement to create a not-for-profit trust to run the authority's failing leisure department.

Mr Tall said: "We're disappointed that the idea of a leisure trust didn't get accepted and it's a real shame. It would have enabled the council to run better leisure services at lower costs. What we have got to do now is to work out a way in which the council can pull together to improve its leisure services as soon as possible."

Spending highlights agreed by Labour, Lib Dems, and the Greens, include reversing cuts to allotments, extending burial services to weekends to meet the needs of Muslims and Jews, reversing area committee budget cuts, a study on housing foyer, a scheme to help homeless youngsters, a new energy officer post with a small spending budget, funding for new Cowley Service Centre and additional weekly waste contingency.

Lib Dems and the Greens joined forces to agree on the remainder of the items, including benefits take-up campaign, reversing cuts to Asian families worker, additional Dial-A-Ride service, reversing cuts to playschemes co-ordinator, additional money for playgrounds, climate change, additional post within environmental health, more money for area committees to be distributed according to social deprivation and reversing of cuts to domestic violence officer.