Bids by Waiheke Island and northern Rodney to break away from the Auckland Council have failed.

Photo: 123RF

The Local Government Commission has ruled the two communities are too small to sustain their own local councils, independent of the Auckland region.

The final decision ends a four-year battle for the Northern Action Group, based at Auckland's northern fringe, and a two-year bid by a Waiheke Island group.

"Neither - combining the responsibilities of district and regional councils for their respective proposed areas - meet the statutory legislative tests," said Geoff Dangerfield, the lead commissioner for the Auckland re-organisation process.

The commission believed a North Rodney Unitary Authority would have to raise rates by 20 percent initially, and would likely run at a significant loss due to its small population of 24,000.

"That really was what it came down to, the number of functions a unitary council needs to undertake would be quite large, and it would be a struggle for a council of that size to maintain everything that was required," commission chief executive Suzanne Doig said.

The commission also ruled out the option of splitting the large Rodney Local Board in two, arguing that, while viable, it would incur extra cost for Auckland with uncertain potential gains.

"It would need to pass two tests, one that it would give better democratic representation, but also that it improves economic performance across the area," Dr Doig said.

"The commission didn't feel it could be assured it would give greater economic performance, given the added cost to the council to run it."

The commission considered a Waiheke Unitary Authority would have to hike rates by 8 percent at the start and would also run at a significant loss, even without tallying up the transition costs.

Both areas would struggle to carry out their duties and responsibilities, it found.

The commission has spent more than $600,000 on the process.

A consultant's report in August signalled the likely failure of both bids, recommending they not go ahead.

The commission's final decision is open to a High Court challenge on points of law.