TAXPAYERS may be faced with a bill after a town hall pension fund hit trouble in the stock market slump.

Almost 30,000 workers and pensioners in Wearside and Tyneside pay into the Tyne and Wear Pension Fund.

But the scheme - one of Britain's biggest - has been hit by a drop in share prices wiping £126m off its value in the 15 months to June this year.

Managers at South Tyneside Council, who administer the fund, said workers would not have to increase their contributions from the six per cent they pay. But unions believe taxpayers may have to help out if the £2bn fund keeps falling.

Lynne Robson, regional head of local government for Unison, said: "Certainly from a trades union point of view, we would not expect any shortfall to be bolstered by our members. We have got a lot of people who are low pay workers, who would not be able to afford further contributions."

Colin Smith, who represents 18,000 town hall workers in Tyne and Wear as the GMB's head of local government, said: "There is concern at a pension fund losing that level of money on their investments.

"If they have to increase contributions, that should come from the employers' side."

Organisations that contribute to the fund include Sunderland City Council, City of Sunderland College, Sunderland University, Sunderland Housing Group, and Stagecoach.

A spokesman for South Tyneside Council said the fund's performance was five per cent better than average.

Nationally, the market has plunged by 30 per cent, leaving a £55bn hole in British pension funds.