The proposed devolution deal for Norfolk and Suffolk has been derailed following an unexpected decision by West Norfolk Council.
Members voted 14 to 44 to reject the deal, which would have seen the counties form a single combined authority under an elected mayor.
Breckland, North Norfolk, Norwich and Great Yarmouth councils had already withdrawn from the process and the borough council’s vote, cast at a full council meeting last Thursday, was the final nail in the coffin.
The decision prompted communities and local government secretary Sajid Javid to withdraw his offer of devolved powers this week.
Mr Javid said the deal could have brought an £880m boost to Norfolk and Suffolk and West Norfolk’s decision was “diappointing”.
“Local people in Norfolk and Suffolk will no longer benefit from £750m of new funding to improve infrastructure, £130m for new homes, and extra powers over transport and skills,” he said.
“This government remains 100 per cent committed to devolution but we respect this local decision.”
Supporters said the deal would boost the economy and create jobs, but critics warned it would create an unnecessary extra tier of local government.
Norfolk County Council leader Cliff Jordan cancelled a special meeting to discuss devolution on Monday.
He said Mr Javid had been clear throughout the process that for a combined authority to be set up, all participating councils would need to be onboard.
“I will be making clear to the secretary of state that Norfolk County Council continues to be willing to discuss alternative proposals,” Mr Jordan added.