Councillors' allowances are to go up by Sh5,000 next month.

"You will now benefit from an extra Sh5,000 in pay beginning October, but you must also work hard," Deputy Prime Minister and Local Government minister Musalia Mudavadi told hundreds of civic leaders at Tom Mboya Labour College, Kisumu, on Friday afternoon.

The announcement sharply contrasts pronouncements made in the recent past by President Kibaki, Prime Minister Raila Odinga and Mr Mudavadi himself about lack of funds for their pay demand.

It is all the more confusing because Mr Mudavadi did not specify the source of the funding for the new burden.

Should the central government not fund the pay rise, it is likely to push most local authorities to the brink of insolvency.

Mr Mudavadi said the increased allowance would come with the extra focus on councillors' contribution to the local authorities they lead, especially the fight against corruption.

"Corruption must stop because the government is committed to improving your welfare if you show that you can deliver," he said. The civic leaders broke into song and dance on receiving the news.

The minister said the increment would motivate councillors across the country. The remainder of the Sh10,000 they were demanding would be given in phases, he added.

Recently, Mr Odinga said local authorities were not making enough money to accommodate the councillors' pay demand.

Some of them are no longer economically viable because they cannot even raise funds to cater for their daily operations, he said.

In May, the deputy PM also ruled out the possibility of giving the pay rise until local authorities generated more revenue. Most of them, he added, could hardly raise enough revenue to sustain their operations.

Mr Mudavadi said then that the ministry was awaiting results of the investigations into, among other things, the viability of councils and their ability to shoulder the burden of increased pay.

But on Saturday, he seemed to have beaten a retreat by announcing the new package.

However, he warned the leaders against laziness and corruption, saying that they should ensure that council by-laws do not hinder service delivery and investment.

At the same time, Mr Mudavadi said his ministry would amend the Local Government Act to make it responsive to modern trends.

Earlier, he toured the main Kisumu bus station that was the scene of protests this week after the municipal council demolished kiosks.

He told the council to stop the demolitions, and called for dialogue and the adherence to the council's by-laws.