Dorset County Council was named as one of the best authorities in the country with an 'excellent' rating in new rankings.

The Dorchester-based authority scored top marks in the first-ever Audit Commission assessment of all county councils and unitary authorities.

It was one of just 20 out of 150 councils nationally to win the excellent rating following a detailed study of every aspect of its work and how it is run.

Now the council says the benefits from the ranking - including fewer budgetary controls and inspections - will mean improved local services.

Council leader Tim Palmer said: "This is an enormous tribute to the quality of the people that we are fortunate to have in Dorset County Council.

"Members of the council are delighted at the result. We are determined to continue improving and aim for the highest standards of service for Dorset people."

The council has achieved the recognition despite poor funding from central government, which was worsened by a new settlement for next year announced yesterday.

The Audit Commission named it as one of the top 12 per cent nationwide and one of only two out of 16 councils in the South West to win excellent status.

The commission ranked every county and unitary council as part of its Comprehensive Performance Assessment (CPA) with authorities rated poor, weak, fair, good or excellent.

Chief executive David Jenkins said: "I am delighted with this independent assessment of the county council, but we have to keep our feet on the ground.

"An excellent judgement doesn't mean that we're perfect - we know that we are not.

"The CPA process is all about driving up standards and improving performance."

He added: "We are now working on an ambitious improvement plan aimed at making our services better."

The council said the new status will give it greater control over how it spends its budget. It also means the number of plans the council will have to draw up for the Government will drop from 66 to two.

The number of Government inspections will drop by half over the next three years that the excellent rating lasts.

Dorset County Council received full marks of four out of four for the overall service it provided to attain the excellent status.

Its breakdown of ratings was four out of four for its environmental services and three out of four for education, social services, libraries, leisure and use of resources.

The Audit Commission report praised Dorset for its 'high quality services, particularly in education and social care'.

It added: "Management of the environment is also a strength.

"The council benefits from effective leadership and uses partnerships to deliver more for local people."

In the South West, Cornwall was excellent, Devon was good, Bournemouth was fair, Poole was good, Somerset was fair and Wiltshire was fair.