I have spoken to David Hodge, the leader of Surrey Council, whose texts were read out at Prime Minister's Questions by Jeremy Corbyn as evidence of a possible sweetheart funding deal between the government and Surrey Council.

Hodge said he "swears on the bible there was no sweetheart deal".

But he concedes the texts he sent were supposed to go to Nick King, the special adviser to Sajid Javid.

Instead they went, by mistake, to a Labour councillor, Hodge told me.

He is furious because he feels that the honour code of members of the Local Government Association - that they don't leak against each other - has been breached by the leaker.

Certainly the leaks make it look as though there was some kind of deal - because they contain the phrase "the numbers you indicated are the numbers that I understand are acceptable for me to accept and call off the R....."

Now the "R" in question is the controversial referendum that Surrey Council was proposing to hold, to authorise a stonking 15% increase in council tax.

This referendum was called off yesterday - which was taken by Corbyn as circumstantial evidence that Surrey had been bought off by Javid and the Department of Communities and Local Government.

This referendum and council-tax rise were hugely embarrassing to the government, because Hodge had made it clear Surrey needed the extra money to fill a black hole in social care.

Having dropped the referendum, Surrey is now imposing a smaller 4.99% rise in council tax.

Jeremy Corbyn rattled Theresa May by reading out the 'leaked' texts Credit: PA

Hodge told me he remains deeply concerned by what he described as the "crisis in social care", which he says is a huge contributor to the shortage of beds in hospitals, with old people unable to leave hospitals because the money isn't available to care for them outside.

He says the reason he called off the referendum is that he is persuaded the government is working on proposals that may put social care on a more sustainable footing.

If he was given an inside track on the government's outline ideas to restore funding for social care, that too would be embarrassing to the prime minister.

When attacked on the alleged leaks by Jeremy Corbyn today, Theresa May looked rattled.

Surrey County Council. Credit: Google Maps

Here is a full transcript of the leaked text messages:

Text from Surrey County Council leader David Hodge:

Nick, I understand you would like to chat this afternoon, grateful if we could speak asap this afternoon, about the way forward. David Hodge

Reply:

Hi David - I haven't specifically asked to speak to you, though it's always a pleasure! Is this something the LGA is trying to set up between us? If so, I'm unaware of the issue. Thanks, Nick

Text from Mr Hodge:

Nick,I am advised that DCLG officials and my Director of Finance/CE have been working on a solution and that you would be contacting me to agree an MOU

Reply:

Do you know what it's about? Sorry I'm being clueless here

Text from Mr Hodge:

I also have been advised that Chief Sec at Treasury is looking at the proposals now, are you in the picture?I am being chased to appear on Sunday TV which are avoiding where possible to avoid any confusion over the work being done in the last days to resolve SCC budge position,David

Text from Mr Hodge:

NickI have received clarification from my CE who confirms Matthew Styles and Sheila Little have just spoken and the numbers you indicated are the numbers that I understand are acceptable for me to accept and call off the R........If it is possible for that infor to be sent to Sheila Little or myself, I can then revert back soonest,Really want to kill this off,David Hodge

Downing Street has denied a "sweetheart deal".

"I'm not going to comment on leaked text messages, but I can assure you there is no sweetheart deal," said a Downing Street spokesman.

Number 10 sources insisted that it was routine and "entirely appropriate" for the Department of Communities and Local Government to have conversations with councils in the run-up to the local government finance settlement.