Local councils are facing massive rises in their insurance bills, following the 11 September attacks on the US.

Finance officials are budgeting for an increase of 25% this year, but some authorities could see the cover for public buildings rise by as much as 100%, according to the Local Government Association (LGA).

It said each local authority would have higher bills next year, totalling more than £50m across the country.

LGA policy officer Trevor Wenman said: "We are aware that there is a problem with premiums increasing, and this is due to two factors.

"The first is 11 September and the second is that there has been contraction in the insurance market for local authority insurance, a result of several years of disasters, such as the floods of October 2000."

Fitch analyst David Wharrier said: "All councils will see price increases because increased costs are being passed on from reinsurers."

Groupama's underwriting and strategy director Paul Brearton said Groupama would be increasing the cost of property cover by an average 30%.

But he said councils could avoid the steep rate increases by sharing some of the risk through greater excesses and improved risk management schemes.

"The cost of reinsurance and property results over the last two or three years have been very poor," he said.

"There are a number of players in the market who think Independent had a recipe for success by cutting prices when it had not had any big claims for a couple of years. Now it is time for the market to increase prices in order to fund future large losses."