The error meant that rates would have increased in locations they should have decreased.

"The relevant council officers identified that the rates resolution had not incorporated adjustment factors supplied by the Officer of the Valuer-General," acting general manager Rohan Willis said.

"The effect of this error is that the cents in the dollar in the rate resolution was increased from the prior year when indeed it should have been decreased in order to implement Council's objective of containing the rate increase at 2.75 per cent.

"The impact of this error is that rates would increase by as much as 15 per cent which is clearly not council's wish or in the interests of the broader community."

Residential rates in all seven Dorset towns will decrease, from a reduction of $12.22 in Scottsdale to $45.49 in Tomahawk.

Primary Production, Commercial, Industrial and Community Services rates will increase.