Chesterfield Borough Council has been forced to reconsider its decision to become a member of Sheffield city region after Derbyshire CC threatened legal action.
The borough said it would carry out an equality impact assessment before considering the issue afresh at a meeting next month.
Chesterfield said it would consider its devolution options again to ‘prevent taxpayers’ money being wasted on an unnecessary legal challenge’.
Derbyshire had threatened a judicial review unless Chesterfield reconsidered as it believes an equality impact assessment should have been conducted.
The Derbyshire town of Chesterfield
Tensions between the two councils have erupted into the open in recent weeks.
Chesterfield leader Cllr John Burrows said: ‘The only people who benefit from judicial reviews are the barristers presenting the cases.
‘We could have opposed this legal challenge but that would have cost Derbyshire’s taxpayers a lot of money and wasted a huge amount of time and effort.’
A spokesman for the borough added: ‘Despite Chesterfield BC’s report following a similar format as every other district and borough council in Derbyshire that took devolution deal decisions Derbyshire CC has only issued the legal challenge against us.
‘No other Derbyshire council has published a full equality impact assessment, including Derbyshire CC itself.’
A Derbyshire spokesperson said: 'We don’t consider making legal challenges lightly. But we have a duty to act in the best interests of everyone living in Derbyshire and we’re pleased Chesterfield Borough Council has chosen to review its earlier decision and take a fresh look. The decision was unique in Derbyshire because the borough council voted to apply for full membership of a combined authority outside the county.
'This could impact massively on local people in the longer term and the borough council should have done an equality impact assessment to look at the potential impact of its decision on people protected by anti-discrimination legislation such as vulnerable and disadvantaged residents.'