It would mean abandoning the wholesale review of shire councils in England, which was aimed at replacing two-tier (county and district) councils with all-purpose authorities. Any change in the review rules will be resisted fiercely by the district councils, and is likely to provoke battles in the courts.
John Gummer, Secretary of State for the Environment, is this week expected to announce changes in the way the Local Government Commission for England should conduct its review.
He is expected to make the process voluntary, so that councils will only get a review if they 'opt-in'. He is also likely to impose a 'hurdle' - insisting that requests for review will have to be backed by councils representing 50 per cent of the area's population.
The expected changes are fraught with legal difficulty. The Commission has completed the first tranche of the review, including draft proposals to abolish Avon, Cleveland and Humberside county councils, and in Derbyshire to replace the nine districts with two authorities.
Many of the proposals have been highly controversial. If the minister now changes the rules before the process is complete, he will be vulnerable to applications for judicial review from aggrieved councils in this first tranche.
The district councils see the proposed change as a way of substantially stopping the review, without the Government having to say so. Lady Elizabeth Anson, chairman of the Association of District Councils said last night: 'I am very alarmed at this idea of opting in. To go for an 'opting-in' system with hurdles would be a weak compromise from the Government given its firm commitment to the review. It is ill-advised to, in effect, give councils a veto over others' aspirations. Such a system could be even more divisive for local government than the present proposals,' she said.
Jack Straw, the Labour environment spokeman, has told Mr Gummer that his party would strongly oppose any 'political tampering' with the review. In a letter to the minister he said Labour was 'wholly opposed to the abandonment of the review process, or to the imposition, at this stage well into the review, of some kind of 'opting-in' process.
'This could lead to quite unnecessary, and often unproductive local dissent, and to an extraordinary mish-mash of arrangements based on no clear principles but on the accident of whether particular counties happened to apply and then meet any opting-in criteria.'
He added: 'An effective refusal to allow for a review in certain areas (those which failed to meet opting-in criteria) would also open the Government to charges of partisanship, especially given the clear decision of your colleagues, the Secretaries of State for Scotland and Wales, to review local government in the whole of those countries.'