The Conservative-Liberal Democrat coalition running Birmingham City Council launched an extraordinary attack last night, describing opposition Labour councillors as deluded schizophrenics with senile dementia.

The annual city council budget meeting descended into the ugly trading of insults, with council leader Mike Whitby ridiculing Labour as a collection of "buffoons" unable to read and intent on maligning Birmingham.

Temperatures soared after Labour sought to highlight criticism of weak council leadership in the Audit Commission Comprehensive Performance Assessment.

Commission inspectors concluded the council was a "long way from excellence" and awarded the city two stars, denoting performance at minimum requirements.

Coun Whitby (Con Harborne), who said the coalition was addressing problems caused by Labour's 20 years in control, rounded on critics: "You laugh like buffoons. You may not be able to read."

But the harshest words were reserved for Labour's Marj Bridle, who accused the coalition of being bereft of ideas.

Describing her as a "sad legacy", Coun Whitby, who reminded the council he had trained as a sociologist, said he believed Coun Bridle (Lab Shard End) might be suffering schizophrenia, delusion and amnesia.

Several Tory and Liberal Democrat councillors used the debate to suggest Labour councillors were suffering senile dementia because they had only a selective memory of their stewardship.

Labour group leader, Sir Albert Bore, accused Coun Whitby of running scared by refusing to hold a referendum on whether Birmingham should be run by a directly elected mayor.

This was because the council leader feared the result of a poll would reinforce the Audit Commission's findings and reflect public disquiet about poor leadership, Sir Albert (Lab Ladywood) added.

The meeting approved a 1.9 per cent council tax increase, equivalent to 38p a week for the average property.

Coun Whitby said: "I can confidently say we have the lowest council tax increase throughout the core cities, which include Manchester, Liverpool, Leeds, Sheffield, Nottingham, Bristol and Newcastle."

He said the coalition would continue to improve services while maintaining fiscal discipline and searching for efficiency savings, which amounted to #215 million since 2004.

Protecting and supporting vulnerable people would be a key priority, reflected by an additional #83 million in social care over the past three years.

An alternative Labour budget, which would also have seen a 1.9 per rise but involved more money to devolved services, was rejected.

Labour said the coalition's successes in improving housing and social services were the result of generous Government funding and policies put in place by the previous Labour administration.