Telegraph Money is campaigning for the levy to be scrapped nationwide.

Meghan Gallacher, the Scottish Conservative housing spokesman, said: “Homeowners will be relieved that this eye-watering council tax hike has been paused, but this embarrassing U-turn exposes just how rushed and badly thought out this policy was.

“This confusion is the direct result of SNP ministers giving councils the power to impose these punitive premiums without proper planning or safeguards.

“This policy is not a solution to the SNP’s housing crisis. The only way to address the emergency is to deliver the volume of new homes Scotland desperately needs, which the Nationalists have lamentably failed to do.”

Meanwhile, other councils across Britain also said they were ripping up their policies on second homes over fears the tax was negatively affecting local businesses and property markets.

Rushcliffe borough council in Nottinghamshire has proposed scrapping the levy entirely, while Pembrokeshire council has reduced its second home premium twice in the past two years.

Despite this, in Scotland – where there are around 20,927 second homes – some local authorities have moved to take advantage of the new rules allowing uncapped premiums.

Highland council introduced a premium of 300pc on April 1, while Midlothian council increased the charge to 500pc for some second home owners.

Second homes are defined as properties that are occupied for 25 days or more in a year but are not someone’s main residence.

In England, a 100pc cap applies to second home premiums, while in Wales, councils can raise the tax by up to 300pc.

Edinburgh council said that second home owners would receive a new bill reflecting the reduced premium. This will also factor in any payments already made at the higher amount, but the local authority said refunds would be considered on request.

Edinburgh Councillor Mandy Watt said: “We’ve written to all affected homeowners to advise that we’ve suspended the rise in Council Tax for second homes. This will allow us to engage on the impact of the rise and consider any amendments or exemptions to the policy. The rate will remain at last year’s level while we do this. We’re sorry for any uncertainty this has caused.”