It is yet another budgetary pressure on the local authority, along with an estimated £634,000 reduction in what it receives in interest on its cash deposits.

The council will also have to pay an extra £854,000 from its revenue budget in interest and expenses incurred on loans taken to finance new capital expenditure, including schools. There will, however, be some savings under these miscellaneous items which are not specific to any department.

SBC expects to save £229,000 by paying less than it had budgeted to the Lothian and Borders police and fire boards because of "efficiencies in service delivery".

A further £218,000 will be salvaged because of improvements in procurement processes.

Councillor Neil Calvert, executive member for finance, expressed satisfaction that the current level of general fund reserves had remained stable at £6.1million, or 2.3 per cent of total revenue spending.

"I think the recent freeze had shown us the need to keep at least this level of reserves, given that we now estimate our winter maintenance spending will be £1.5million over budget by the end of March," said Mr Calvert.

"We also face legal claims and there is no way of knowing how and when these will turn out.

"And, of course, we need reserves in the event of flooding. Heaven help us if one of our main bridges was to collapse."

The legal claims he spoke of are from First Bus over student passes and from Scottish Borders Housing Association which alleges it paid for houses which had already been bought under right to buy before all SBC stock was transferred in 2003.