Chair of the Liverpool City Region Combined Authority has rejected the Government's claim that it has 'agreed to the principle' of an elected mayor, it has emerged.
Local leaders met with Whitehall officials and local government secretary Greg Clarke this week to discuss developing a similar devolution package to Manchester's.
The move could hand a raft of transport and planning powers to the city, provided it adopts the directly elected mayor system. Elected mayor Joe Anderson already leads the city of Liverpool.
Following the Budget this week, Lord O'Neill said the region's leaders had 'signed up to the concept'.
However combined authority chair Cllr Phil Davies, who is also the leader of Wirral Council, told the BBC: 'I have no idea why he [Lord O'Neill] is saying this', adding that the councils 'keeping our options open'.
It is thought some leaders in the region, which includes Merseyside's five councils as well as Halton are thought to be cautious about the idea of an elected mayor.
When pressed by the BBC in the wake of the Budget Lord O'Neill said: 'They have agreed to the principle of a mayor. That's been made clear in this statement.
'There was a statement made for an intent for... the Liverpool area. In my view that is good progress compared with where I suspected we might have been a few weeks ago.
'They (the council leaders) have signed up to the concept of an elected mayor for the broader metro area of Greater Merseyside. And now I will be involved with some of my colleagues in having some pretty active conversations with them on a timetable and what kind of powers they would have devolved to them.'