Plans to abolish all councils in Devon and replace them with four new unitary authorities have been paused, with the project already costing several million pounds.
In a surprise announcement, the government said it was launching a review of the plans across the country, following legal advice. The reorganisation would have been the biggest change to local government in 50 years.
The government had previously approved plans to expand Plymouth, Torbay and Exeter, with the rest of Devon forming a separate authority. The Labour government said it wanted to make local government simpler and more streamlined, but other parties heavily criticised the plans, saying they would damage services and increase costs for taxpayers.
The Ministry of Housing, Communities and Local Government (MHCLG) said in a statement that the review was to ensure the plan was "robust and aligns with new government priorities".
Paul Arnott, Liberal Democrat deputy leader of Devon County Council and leader of East Devon District Council, welcomed the decision but said the project had already cost millions.
He said: "At both county and district levels, at least 30% of officer capacity has been redirected to work on local government reorganisation – that is multiple millions of pounds."
Arnott said credit should go to Prime Minister Andy Burnham for having the "good judgment and humility" to pause and review the plans.
He said: "However, the district councils and the county council have been left with an enormous bill for this."
Exeter City Council leader Phil Bialyk said he was "disappointed that Exeter's long wait for unitary status will now be delayed while this review takes place".
Exeter previously tried to become a unitary council but those plans were halted by the Conservative government in 2010, external.
Bialyk added: "But I understand that there needs to a review because the new prime minister and new administration need to be satisfied that the decisions made are the right ones and that the right processes were followed."
South Hams District Council leader Dan Thomas said he was "pleased" the government had listened to responses about the proposed changes, which would have seen the council abolished.
Thomas said the plans had "caused deep disappointment and serious concern across our rural towns, villages and coastal communities".
Tudor Evans, leader of Labour-run Plymouth City Council, said the authority understood the decision.
He said: "We will continue to engage with the MHCLG as it reviews the programme and will await decisions on any future plans.
"In the meantime, we welcome its continued commitment to devolving more decision making away from Westminster."
Devon Council Reorganisation Pause Leaves Millions Bill