David Hodge, the Tory leader of Surrey Council, insisted his decision not to press ahead with the drastic levy rise was not the result of being offered extra cash from Whitehall to meet rising social care costs.
He spoke out today after Theresa May faced allegations in the Commons that ministers secretly agreed a funding deal with Mr Hodges to avoid an embarrassing local referendum on the proposed council tax rise.
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David Hodge, of Surrey Council, denied making a deal with the Government over a tax hike
The texts discussing details of the council's finances were meant for a senior aide at the Department for Communities and Local Government but were sent to a Labour council chief by mistake and forwarded to Jeremy Corbyn's office.
The Labour leader then confronted Mrs May with the allegations of a "sweetheart" deal during Prime Minister's Questions.
Mr Hodge denied the deal in a statement today.
Surrey Council denied being offered extra cash from Whitehall for rising social care costs
He said: "Surrey's decision not to proceed with a 15 per cent council tax increase was ours alone and there has been no deal between Surrey County Council and the Government.
"However, I am confident that the Government now understands the real pressures in adult social care and the need for a lasting solution."
A Downing Street spokesman said: "I'm not going to comment on leaked text messages, but I can assure you there is no sweetheart deal."
Surrey Council dropped plans for a referendum on a proposed 15 per cent council tax increase to fund adult social care earlier this week.
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A row erupted when Mr Hodge's text messages were revealed in the House of Commons
Instead, the council agreed to go ahead with a 4.99 per cent increase in the levy.
I'm not going to comment on leaked text messages, but I can assure you there is no sweetheart deal
In the Commons today, Mr Corbyn claimed text messages sent by Mr Hodge showed his decision followed an apparent offer of extra cash from the Government.
One message said the council and Whitehall officials "have been working on a solution".
Another message said: "The numbers you indicated are the numbers I understand are acceptable for me to accept and call off the R", an apparent reference to the referendum.
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The message ended with Mr Hodge saying "really want to kill this off".
Mr Hodge was thought to have been mistakenly under the impression he was texting the messages to Nick King, a special adviser to Tory Communities Secretary Sajid Javid.
Instead, the messages went to Nick Forbes, the Labour leader of Newcastle City Council and were passed onto the Labour leader's office.
In the Commons, Mr Corbyn asked Mrs May: "So how much did the Government offer Surrey to kill this off and is the same sweetheart deal on offer to every council facing the social care crisis created by her government?"
The council agreed to go go with a 5 per cent hike instead of the proposed 15 per cent
Mrs May did not respond directly to the allegation, saying: "The decision as to whether or not to hold a referendum in Surrey is entirely a matter for the local authority in Surrey—Surrey County Council."
A Labour source said: "Words are interpretable in different ways, but I think it's quite clear there has been discussions about numbers and that's led them to call off the referendum."
Shadow health secretary Jonathan Ashworth called for full disclosure of all Government contacts with Surrey over the council tax issue and demanded an urgent statement in the Commons from Mr Javid.
The Labour source said: "Both the Chancellor and the Health Secretary are Surrey constituency MPs and it is reasonable to ask what contacts have been made and what discussions have been had."
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But Tory MP Crispin Blunt, who represents Reigate in Surrey, said Mr Hodge's messages related to discussions about government funding formulas.
He told BBC Radio 4's The World at One programme: "What they can't have got is any formal deal.
"What I believe will have happened is that they have been taken through the department's plans for the future both in terms of the plan for business rate retention as well as the fair funding formula review and that will have given the leader of the council sufficient comfort then to be able to recommend to his colleagues that they call off the referendum."
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