The Government's proposed changes to local government laws could be reconsidered, Prime Minister John Key has indicated.
Councils, the Greens and Grey Power say the Local Government Amendment Bill (No 2) gives dangerous new powers to the government-appointed Local Government Commission.
It allows the commission to create council controlled organisations (CCOs) to handle utilities like water and roading, potentially across boundaries, without council agreement.
The councils say it's an assault on democracy.
The Bill has passed its first reading and is in front of a select committee.
Mr Key says the Government won't die in a ditch over it.
"The Government isn't absolutely buttoned down on the issue," he told reporters.
"We're quite happy to continue to discuss it, and if there's a better way forward then we will do that... we're not die in a ditch on this."
He says the Government does think that having integrated CCOs across councils can provide "some real benefits" for ratepayers.