LIBERAL Democrat plans to axe the council tax were in chaos last night after the party admitted its leader, Charles Kennedy, could not explain the flagship policy.

Launching his manifesto yesterday, Mr Kennedy struggled to put a figure on earnings above which a couple would be worse off under a replacement local income tax.

Colleagues stepped in to say the threshold could be as low as £38,000 - which is below the joint income of a man and a woman on average earnings.

In a further embarrassment, Mr Kennedy also wrongly denied that a local income tax would raise £2.4bn less than council tax - leaving local authorities with a shortfall.

Vincent Cable, Lib Dem treasury spokesman, was heard whispering to an aide: "Charles clearly got wrong that thing on income tax. We will have to sort it out."

Challenged later to admit that Mr Kennedy did not know his own policies, Mr Cable said: "He does, but that did not come across."

Deputy Prime Minister John Prescott attacked the proposals, which he claimed would leave a couple on average combined earnings of £41,000 at least £260 a year worse off.

Mr Prescott said: "The Lib Dems always fail to say that their plans would lead to huge increases for lower-paid workers and those who do not pay any council tax at all, such as nurses in training."

Conservative co-chairman Liam Fox dubbed the Lib Dems a "shambles", adding: "They do not even know the details of their own tax proposals."

Mr Kennedy, who confessed to a lack of sleep following the birth of his son, Donald, believes scrapping council tax will be a vote-winner with many householders alarmed at rising bills.

An independent study has suggested a local income tax will make 49 per cent of families better off, leave 24 per cent unaffected and hit 27 per cent with a tax increase.

But, while pensioners will be winners - the Lib Dems claim an average pensioner couple will gain £1,132 a year - the losers will be two-income

couples in modest homes.

That could hinder Mr Kennedy's attempts to snatch seats from the Conservatives in more affluent areas, where many people would face higher local tax bills.