The latest call to help traders and shoppers in south Norfolk with more free car parking in market towns has been rejected by district councillors.

An idea put forward by opposition Liberal Democrat councillors at South Norfolk Council to suspend parking fees in Wymondham, Diss and Loddon on Saturday afternoons as a way of generating footfall in the towns was thrown out at a meeting this week.

Conservative leaders called the suggestion 'absolutely laughable' against the fact that parking charges had first been introduced under a Lib Dem-controlled council.

The issue raised its head when the authority set its budget and a council tax freeze at a meeting on Monday.

Leader John Fuller said: 'We are living within our means and living within our means is very important in this current time as residents have to draw in their belts but it's meant we have been able to freeze council tax for the third time in four years.'

Opposition leader, Liberal Democrat Murray Gray, supported the freeze but offered alternative options in which the council's money could be invested, including using likely increases in interest rates to shelve market town parking fees on Saturday afternoons and reduce the financial burden on Harleston Town Council which already funds free parking for its residents and visitors.

Currently drivers are able to park for one hour free before being charged. However, all fees will be dropped on April 29 to celebrate the royal wedding of Prince William and Kate Middleton.

Figures obtained by the Mercury last year through a Freedom of Information request showed that South Norfolk Council received more than �240,000 in charges and fines from its car parks between April 2009 and April 2010, but spent only �99,000 on car park maintenance and resurfacing.

Dr Gray said: 'The speculation is that interest rates will start to rise later this year and should bring in additional unbudgeted interest income. Our proposal would be to use this income, as and when it is quantifiable, to increase free parking in our market towns in order to give a much needed stimulus to their economies.'

Conservative councillors Martin Wynne and Joseph Mooney, who represent Wymondham, said dropping fees could have a devastating effect on Central Hall, which relies on income from drivers using its own car park – the largest in Wymondham – to pay off its recently completed refurbishment.

'This could close their car park down. They would have no income and they have committed thousands and thousands of pounds to their refurbishment which has been brilliant for the centre of Wymondham,' said Mr Wynne.

Following the meeting, Brain Randall, chairman of the Central Hall trustees, said many did not realise how integral its car park was to its survival.

'We have always felt we should keep our prices in line with the council because we are part of the town centre. If the council makes more hours free then we will find it difficult,' said Mr Randall.

But Robert Smith, of the Wymondham Retailer Traders Group and partner of The Book Fountain, in Whartons Court, said a bigger shake-up then just shelving fees on a Saturday afternoon was needed.

'South Norfolk Council seems to treat every town the same but each is different in terms of size and proximity to Norwich. Here the free hour is not long enough but the car parking is so cheap that they park, get on the bus and go into the city. Less than two hours free works against the commercial interests of the town while anything under �5 a day also works against the town,' he said.