Parliament on Thursday rejected a government proposal for holding a single island-wide referendum on the planned merger of municipalities as part of a drive to reform local government.
The decision went 29 to 16.
In late March, the cabinet approved a proposal for a single referendum to be held on local authority reform whose discussion has been dragging on for years amid opposition from political parties and certain communities.
Earlier, opposition parties had thrown a spanner in the works by suggesting individual referendums be held by communities to decide whether they wanted the reform, which includes mergers.
The reform provides for sweeping changes in local authority operation, including cutting the number of municipalities from 30 to 17 and fusing hundreds of communities to achieve economies of scale.
The government said having individual communities reject the reform bill after it is passed by parliament would essentially nullify the reform, as it would render it unenforceable.
The government proposal envisaged having the single referendum on May 30 in tandem with the parliamentary elections.