SDLP, DUP, UUP and Alliance assembly members warned yesterday (Tuesday) that plans to cut the number of councils from 26 to seven could lead to political "repartition".
A motion in the transitional assembly by the SDLP's Tommy Gallagher expressed alarm that seven 'super councils' would "centralise services, remove jobs and resources from many areas and underpin sectarianism and community division".
A Sinn Féin motion in support of the seven councils plan was defeated 44 to 16 votes, while a SDLP motion against the 'super councils' was carried. Sinn Féin however reaffirmed its support for the new arrangements, saying they would be underpinned by power-sharing, equality and social inclusion.
Mr Gallagher said he believed the plan was totally inappropriate and would lead to rates hikes in some areas as they take on the burden of larger towns.
"It will lead to over-centralisation at the expense of rural areas and to Balkanisation."
Sinn Féin's Alex Maskey argued the seven-council model provided for greater cohesion.
"The smaller number of councils you have... you force more parties to work together."
But the DUP's Peter Weir claimed the changes would cost up to £120 million in redundancies, pensions and other costs.
Alliance's Sean Neeson also said the model represented a "sectarian carve-up" between east and west.