Smaller councils fear they could be forced into mergers with larger neighbours as the Government fast-tracks sweeping local government reform, warning regions to design their own future or face intervention.
Councils were given a three-month ultimatum this week to work with neighbouring authorities to propose new structures, with plans judged on efficiency, simplicity, and how well they represent communities.
It followed an announcement in November that groups of city and district mayors would be forced to come up with such plans.
RMA Reform Minister Chris Bishop said the current system was fragmented.
"We've got 78 councils across a country of around 5 million people, and our view is too often that leads to duplication, dysfunction and decisions that don't make sense," he told a media conference on Tuesday.
"Our message to councils is simple: Lead your own reform, or we will do it for you. Either way, change is coming."
However, the proposal has raised concerns, particularly among smaller councils worried about losing influence and facing higher costs.
Upper Hutt Mayor Peri Zee told 1News residents feared their local voice could be diluted if the city is merged into a wider Wellington authority.
"We're worried we'll end up spending more on rates and not necessarily seeing the benefit," she said.
"These are really important conversations and these impacts more matter for generations, so I'm really keen to ensure that we get that opportunity to ask our community and we respect their views."
There were also concerns larger councils could effectively force smaller ones into mergers under the proposed model, which allows councils representing more than half a region's population to drive decisions.
Tasman Mayor Tim King warned this could "almost compel" others to join, while acknowledging central government may step in if regions fail to agree.
"I think the risk with the proposed opt‑in model is that councils representing more than 50% of the collective population can, in the way I read this, almost compel other councils to be included."
Some areas — including Northland, Southland and Taranaki — were already well advanced in discussions and could meet the Government's deadline.
"There are a few regions that have had these discussions for quite some time and we would expect that they will probably be ready," Local Government NZ president Rehette Stoltz said.
Final proposals were expected by August 9, and the Government said it was prepared to impose changes if councils could not reach agreement.
The plans would then be developed in detail and signed off in 2027 to be implemented ahead of the 2028 local elections.
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