The High Court rejected an attempt by Somerset, Avon and Cleveland to overturn Local Government Commission recommendations that they should be replaced by 'unitary' authorities, combining the functions of county and district councils.
The councils argued that the plans were based on irrelevant factors, flew in the face of public opinion and would not secure more efficient local government.
But Lord Justice Staughton, sitting with Mr Justice Buckley, said the councils attacked the proposals because they disagreed with them - and that, by itself, was no ground for judicial review.
The commission was awarded costs against the councils, which are to seek leave to appeal.
Somerset complained that the commission, in proposing the creation of three one-tier unitary authorities based on West, Mid and South Somerset, failed to identify the interests of local communities or give appropriate weight to the cost of the proposals.
Avon, faced with replacement by the councils of Northavon and Kingswood, Woodspring, Bristol, and Bath and Wansdyke, said there had been a failure to consider the status quo, community identity and the difficulties of providing cross-boundary local government services now under one umbrella.
Cleveland, objecting to the transfer of its functions to the district councils of Hartlepool, Langbaurgh-on-Tees, Middlesbrough and Stockton-on-Tees, accused the commission of misconstruing policy guidance on co-operation between councils, failing properly to consult the public and reaching an unreasonable decision.
Yesterday's ruling followed failed appeals by Humberside and North Yorkshire.