The proposal forms part of a wider report calling for greater fiscal powers for local authorities
Millions of households could face bigger council tax increases under plans to scrap the rules that currently give residents a vote on large rises.
A cross-party group of MPs is urging prime minister-in-waiting Andy Burnham to remove the requirement for councils to hold referendums before increasing council tax above the current limits.
At the moment, councils must ask local residents for permission if they want to raise council tax by more than five per cent, or three per cent for authorities that do not provide adult social care.
However, the all-party parliamentary group on local government says those rules should be scrapped, arguing that councils should be free to set council tax without holding a public vote.
The group believes voters should instead hold councils to account through local elections, deciding whether the services they receive are worth the level of council tax being charged.
The proposal forms part of a wider report calling for greater fiscal powers for local authorities, with the MPs arguing that more financial independence is needed to help drive economic growth.
Labour MP Clive Betts, who chairs the APPG and supports Mr Burnham's leadership bid, told Sky News he wants to see "devolution of accountability and responsibility" alongside the transfer of powers.
"In the end, councils who are elected should be responsible for explaining local tax to local voters.
"Those voters will decide whether councils behave reasonably for the level of council tax they are levying," he said.
Mr Betts said councils had been free to set their own council tax levels for more than 100 years before the referendum rules were introduced in 2011, arguing that the current system is a relatively recent change.
The report also describes the existing rules as "absurd", pointing out that several councils have already been given Government permission to increase council tax by more than five per cent without asking residents to vote.
These exemptions have been granted to prevent financially strained authorities from collapsing as they grapple with substantial funding shortfalls.
"If councils facing acute financial pressures can be trusted to set higher council tax rates some because of their own poor leadership why can't all local authorities do so?" the MPs ask.
The group acknowledges that removing the referendum requirement would carry "political costs" for councils choosing to implement larger rises.
The report also calls for councils to be given greater control over local taxes. MPs want a share of income tax and stamp duty to be kept in local areas, along with taxes such as landfill tax and the growth and skills levy.
They say this could give councils control over an extra £79billion to spend on public services.
The MPs also suggest Mr Burnham should follow Wales by creating a new, higher council tax band for the most expensive homes.
Meanwhile, ministers are expected to announce a major overhaul of English local government on Thursday.
The plans would merge district and county councils into single authorities responsible for delivering all local services, although some areas could have the changes imposed on them against their wishes.
