NSW Premier Mike Baird has vowed to forge ahead with the government's plan to merge three councils in Sydney's inner west just hours after the proposal was knocked back in court.
The state government was forced to withdraw from the case in the Land and Environment Court on Tuesday after conceding there were legal errors in the report looking into the merger of Strathfield, Burwood and Canada Bay councils.
When asked by Labor MP Jodi McKay whether the government would now abandon the planned merger, Premier Baird had a definitive answer.
"No, no, no, no," he said during question time in NSW parliament on Tuesday afternoon.
He said the government would continue to comply with the court process.
"If we are required to amend reports or re-do sections, we will do that," Mr Baird said.
The case was brought before the court following an appeal against the forced merger from Strathfield Council.
Local Government Minister Paul Toole said the government-appointed delegate in charge of the Boundaries Commission report, which formed the basis of the proposed merger, will consider the matter and reissue his report.
The setback is evidence the Baird government's controversial amalgamation has fallen into legal disarray, Greens MP David Shoebridge said.
"When a government tries to do a job on local communities and cut legal corners and rush through an undemocratic process, it is no wonder they trip up," Mr Shoebridge said.
"Effectively the government has given up on trying to defend the delegate's report," he said in a statement.
Several other councils are appealing the government's decision to force mergers on similar grounds. It's unclear whether those cases will have a similar outcome.
In the meantime, the three inner-Sydney councils affected in Tuesday's case will remain in legal limbo.
Dozens of councils were unified to create 19 mega-councils earlier this month as part of the state government's controversial amalgamation plan.
Administrators have been appointed to run the new councils until local government elections are held in September 2017.
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