A financial report to go before Norwich City Council's audit committee tomorrow will show a £290m fall in the paper valuation of the city's assets due to the collapse in property prices.

However, the deficit within the 2008-09 accounts, which is also attributable to the impact of the worldwide financial crisis on pension fund returns, will have no effect on tax payers or on the council's finances.

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The statement of accounts report, which encompasses both the general fund and the housing revenue account and covers more than 20,000 of the city council's assets, shows a drop from £1.014 billion to £724 million.

Barry Marshall, the City Council's Head of Finance, said the shortfall could be reversed within the next 12 months should property prices and investment returns improve.

He said: "In practice this has no impact whatsoever on tax payers or council finances. While the figures in themselves may appear alarming they simply reflect the current state of the property market and the economic environment.

"Council's throughout the country will be experiencing similar issues with their accounts because of plummeting property prices and investment returns."

(CD/JM)