Council tax bills could be frozen next year under plans to be included in Tuesday's emergency Budget, it is understood.
Chancellor George Osborne is expected to unveil the harshest package of spending cuts and tax rises seen for a generation in the "emergency" statement.
He defended the severity of the "tough but fair" measures on Sunday - warning the country was on "the road to ruin" without swifter action to tackle the record deficit.
Public sector pay and "out of control" welfare spending are expected to face a serious squeeze as part of a blueprint for the whole Parliament, not just the coming year.
Mr Osborne will deliver some glimmers of good news for voters however - including a pledge to work with local authorities on a council tax freeze in 2011/12.
The Tory manifesto promised a two-year freeze - promising to refund councils which did not put up council tax from savings made on government consultants and advertising.
The coalition agreement between the Conservatives and Liberal Democrats said it would be frozen "for at least one year" with the second becoming an aspiration.
Mr Osborne earlier defended going "further and faster" with austerity measures than Labour amid Opposition warnings his approach risked a double-dip recession.
In a television interview just two days before his first Budget statement to MPs, Mr Osborne refused to be drawn on any details of his proposals.
They were agreed on Friday in a meeting with Prime Minister David Cameron and Lib Dem coalition partners Nick Clegg, the Deputy PM, and Chief Treasury Secretary Danny Alexander.