Plans to axe all of Norfolk's councils and replace them with three new ones have been scrapped, less than a year before elections to the replacement authorities were due to take place.
Angela Rayner, the communities secretary, said the bombshell decision had been taken after advice from lawyers, in the face of a legal challenge launched by councils opposed to the policy, including two in Norfolk.
The move has thrown into chaos the protracted reorganisation of local government in the county, and elsewhere in England, which had been a flagship policy for Labour ministers.
They had previously announced that Norfolk's eight councils - Norfolk County Council, Norwich City Council, South Norfolk Council, Broadland District Council, Breckland District Council, Great Yarmouth Borough Council, North Norfolk Council and West Norfolk Council - would be abolished and replaced with three new ones.
The three new ones - Greater Norwich City, East Norfolk and West Norfolk - which were due to replace them would have been unitary councils, providing all services.
That entire process has now been halted. Similar schemes in Suffolk, Essex and Hampshire have also been withdrawn.
Plans still in the pipeline for 14 other areas, including Cambridgeshire and Peterborough, and West Sussex, will also be reviewed and paused while this is carried out.
The government said it means local elections for next year will go ahead on existing council boundaries.
Ms Rayner told Parliament: "The prime minister told the house last week, he was ‘prepared to look at local government reorganisation’ and he asked me as his communities secretary to 'do that'.
"In that context, in light of legal advice, I want to satisfy myself firstly that the right process is in place, that it is robust, and of course complies with the law.
"And secondly, I want to fully test whether our proposals for local government reorganisation meet the priorities of a new administration and a new prime minister and any additional considerations.
"I do not take this lightly. I recognise the huge amount of work that has already gone into progressing reorganisation in each of these areas, and I am very grateful for it.”
Ms Rayner said, as per convention, she would not be revealing what the legal advice she had received about the process was.
Reform-led Norfolk County Council had been seeking a judicial review to challenge the legality of the government decision to abolish all Norfolk's councils and create three new ones.
South Norfolk Council was also challenging the decision.
Robin Hunter-Clarke, deputy leader of Norfolk County Council, said: "This is a huge victory for democracy and, above all, for the people of Norfolk.
"I am delighted that all our hard work in building a strong legal case has helped bring us to this point.
"From the very beginning, we argued that these proposals were wrong for Norfolk.
"The decision to withdraw local government reorganisation is the right one.
"It is a victory for common sense and for everyone who stood up to defend our communities.
"The government has promised to review the process. It can do better than that.
"With public finances in a poor state, ministers should kill off local government reorganisation, once and for all.
“Our focus must now return to delivering high-quality public services, protecting taxpayers’ money and ensuring decisions about Norfolk are made in the best interests of our residents."
Conservative leader Kay Mason Billig, former leader at County Hall, said the decision was "fantastic news".
She said: "The government has finally been forced to step back from its deeply flawed three-unitary proposal and reconsider the whole approach.
"For Norfolk, this is a chance to stop, take a breath and look properly at what kind of local government structure will actually work for our communities and our taxpayers."
She said legal advice to challenge the government's decision-making had been sought when she was leader, before May's elections saw Reform take control.
She said: "When Reform took control of Norfolk County Council, they inherited the work we had already started and quite rightly continued with the legal challenge.
"I am pleased they continued it. The Conservatives in Norfolk were fighting this battle long before Reform arrived.”
The county council had wanted just one council, South Norfolk favoured two and the other councils had submitted a bid for three.
Daniel Elmer, Conservative leader of South Norfolk Council said: “This is a victory for common sense and a great day for the residents of South Norfolk.
"We said from the start that the government’s decision did not make any sense and that they had not followed their own rules. We have now been proved right.
“I am not against local government reorganisation, but it must have the interests of our residents at the heart of any change and that is what we will continue to fight for.”
While the government has withdrawn its previous Norfolk decision, there remains the possibility that reorganisation for the county could return in another form, but the timetable for that is unclear.
And there was extreme frustration among leaders of other district councils at the "circus" created.
Millions of pounds had been set aside in council budgets to pay for the changes, with hundreds of thousands of pounds spent on consultants.
Sam Chapman-Allen, Conservative leader of Breckland District Council leader, branded it a "shambles".
He said: "Breckland Council’s position has always been clear - we do not want local government reorganisation in Norfolk and as such we welcome the government’s intention to withdraw its decision.
“We have always believed that maintaining the status quo of current service delivery is in the best interests of Breckland and the wider county’s residents.
“We will now focus on ascertaining more details from the government and pursuing a full refund for our costs."
Tim Adams, leader of Liberal Democrat-controlled North Norfolk District Council, said he would be asking for the government to reimburse costs.
He said: "I think we've had enough of this tour around the government's fairground. It just feels like a circus.
"A lot of time and money has been expended on this and now we've been put back into limbo.
"It is so frustrating, because we have suspended areas of work which would have brought good results for our residents and economy to focus on this."
Alistair Beales, independent leader of West Norfolk Council, said: "Any idea of replacing the existing eight councils in Norfolk with one or two super councils would not serve local communities well and would be too distant from those they should be serving to be the truly local government that Norfolk people deserve.
"If district and county councils are to be replaced, three sizable councils delivering all local services based around the historic centres of King’s Lynn, Norwich and Great Yarmouth is undoubtedly the way forward."
Carl Smith, Conservative leader of Great Yarmouth Borough Council, said: “Great Yarmouth was always opposed to local government reorganisation, but we went along with the option we thought on balance delivered the best possible outcome for our residents – a model for three unitaries for Norfolk as agreed by the majority of councils in Norfolk.
“The situation is now a complete mess with a huge amount of time and resources being spent on getting to this point in the process.
“Along with others, this authority will now be seeking to recover all our costs as a result of the government’s announcement.
“And, of course we await further information from the government with questions still remaining about devolution and where this leaves local government reorganisation for our county and East Anglia, in the future.”
Elections to the shadow forms of the new authorities had been due to take place in May next year, with the councils themselves being created in 2028.
But, with that now abandoned, it means next May will see all-out elections to Great Yarmouth Borough Council, North Norfolk District Council, Broadland District Council, Breckland District Council, South Norfolk Council, West Norfolk Council and a third of councillors at Norwich City Council - on existing boundaries.
As it stands, Norfolk and Suffolk are due to get an elected mayor in May 2028, as part of the government's devolution drive.
It is not clear how that will be affected by the withdrawal of the local government reorganisation decision, if at all.
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