The prime minister and Jeremy Hunt, the chancellor, are preparing to allow councils to raise the levy by 5% without a local referendum.
The move would mean millions of households in Band D would pay up to £100 extra, pushing their annual bills above £2,000 for the first time.
Homeowners in the most expensive Band H could end up paying up to £200 extra, with their bills topping £4,000.
Under current rules, councils responsible for social care are allowed to increase their bills by 2.99 per cent, including a one per cent social care levy.
If they want to increase the bills further, they need to have a local referendum.
But under new plans expected to be revealed in Thursday’s Autumn Statement, the maximum amount councils can raise bills without holding a referendum is set to rise to 4.99 per cent, to help pay for social care.
Most councils are expected to benefit from the freedom to charge residents more.
The Conservative Party’s 2019 manifesto pledged to retain the veto on major council tax increases, insisting local people will “continue to have the final say”.
But a Treasury source said councils needed “more flexibility” to raise money and pointed out that increases would remain below inflation.
The plan to increase council tax was initially rejected due to concerns that it would hit the poorest hardest when people are struggling to cope with the cost of living.
However, No 10 and No 11 agreed to allow councils to raise more money after deciding to increase benefits and pensions in line with inflation.
