By Giancarlo Rinaldi
BBC Scotland news website
South of Scotland reporter
The administration of Dumfries and Galloway Council has resigned after its proposals for a 6.9% council tax increase were voted down.
The defeat prompted the administration to resign
The SNP, Lib Dem, Independent coalition saw its plans defeated 22 votes to 19 in favour of an opposition Labour amendment tabling a 3% rise.
A number of Tory councillors gave their backing to the amendment which means about 57p a week on a band D property.
A special meeting will be held in 14 days to form a new administration.
Independent council convener Andrew Campbell said it was a "sad day" for Dumfries and Galloway Council.
"I believe in what we have achieved and what was in the pipeline to be achieved," he said.
"I believe this administration will go down in history as one of the most successful councils in the land.
"We believed in our budget," echoed SNP vice convener Robert Higgins. "We cannot serve under this budget. We resign as a group from the administration."
Lib Dem group leader Joan Mitchell also tendered her group's resignation.
"I think it beggars belief that we now have a council that has to take that budget forward," she said.
The resignations were welcomed by Labour group leader Tommy Sloan.
"When you can't put a budget through I believe you should resign," he said.
"The sad day for Dumfries and Galloway was in 2003 when they cobbled together this mish-mash administration."
The administration's 6.9% rise proposals were voted down
In a prepared statement Conservative councillors said: "In no circumstances could we support the huge rise of 6.9% proposed by the administration - the highest rise in Scotland.
"Any administration that cannot carry its budget should resign, and that is what happened."
Earlier in the day the ruling coalition had tabled a 6.9% council tax rise which it said would provide a balance between what people could afford and the need to invest in the future.
Conservative councillors put forward an amendment for a 3.3% rise, stating that they wanted stability and the chance to prove they could run the authority without soaring taxes.
That amendment lost out to a Labour counter-amendment for a 3% rise using more than £9m of balances to keep the increase down - a move which director of finance Robin Bennie had warned might not be "competent".
A number of Tory councillors then voted in favour of the Labour budget, resulting in the defeat of the administration which subsequently stood down.