He says he is disappointed Prime Minister Kevin Rudd cancelled the poll after calling an election for September 7.

“If he could’ve waited just one week this very important referendum would have been held,” Cr Maher said yesterday.

Constitutional recognition of local governments would confirm the federal government’s powers to make grants such as the Roads to Recovery and black- spot funding programs, he said.

“We have been working on this matter since at least 2007 and had the support of all major parties. 

“This is truly disappointing and a concern for the 560 councils across Australia that support the campaign to vote yes.”

Local councils traditionally rely on Commonwealth funding for major programs, but two High Court decisions have cast doubt on that, Cr Maher said.

One, Pape v Commissioner of Taxation in 2009, found the Commonwealth did not have power to directly fund areas such as local government. 

That ruling galvanised local councils into action and Armidale-Dumaresq spent $5000 in the lead-up to the failed referendum.

Uralla Shire Council mayor Michael Pearce said ratepayers there had committed $9000 to the cause and he was “very disappointed” with the outcome.

But representatives of the “No” campaign said the referendum had been cancelled because of a decline in public support.

Convenor of the Citizens’ “No” campaign Julian Leeser said the Local Government Association should hand back the $10 million given from local communities to run the campaign. 

“Ratepayers gave that $10 million to councils to fund local services, not a political campaign,” Mr Leeser said.

“Every single dollar should be handed back from the local government lobby group to ratepayers to help local communities and local services.”