Voluntary merger plans by six Welsh councils have been rejected by the public services minister.
The Williams Commission had called for the 22 councils to be cut by half.
Conwy and Denbighshire along with Blaenau Gwent and Torfaen and Bridgend and the Vale of Glamorgan had suggested pairing up in response to an appeal for voluntary mergers by Leighton Andrews.
However the minister said he was "not persuaded" that the councils had set out a "compelling vision" for merger.
In a statement on Tuesday, Mr Andrews said: "I am disappointed to report that on the basis of this assessment I am not persuaded that any one of these Expressions of Interest sufficiently meets the criteria for moving ahead to prepare a full Voluntary Merger Proposal."
The Leaders of Conwy and Denbighshire Councils have expressed their disappointment following the announcement.
In November, councillors in both Conwy and Denbighshire voted in favour of submitting an expression of interest to the Welsh Government regarding the possibility of a voluntary merger, providing doing so voluntarily would offer substantial financial advantages.
A number of meetings have taken place between both councils over recent months to explore the idea further, political representatives in both counties have set up groups to oversee the merger developments, a number of discussions have taken place with Welsh Government officials and a high level meeting has taken place with Leighton Andrews.
Llangollen county councillor Stuart Davies said: "I am astounded to learn that the Minister, Leighton Andrews, has decided to not accept the offer of voluntary merger from DCC and Conwy.
"This Welsh Government is all over the place, it commissions a report at heavens knows what costs, then when some authorities go along with it, they turn them down!"
"Personally, I never wanted this to happen but after having gone through a budget process, where we are being forced to close old people's homes by the budget cuts from the WG, I find it difficult to comprehend the sheer waste of money.
"The Williams report cost an arm and a leg, local authorities have spent a small fortune on preliminary work and then this Labour Minister comes along and throws it all in the dustbin."
"When we see the sheer waste of money by this Labour-led Welsh Govt I wonder why people vote for them!"
Leader of Denbighshire, Councillor Hugh Evans OBE, said: "We are astounded by today's announcement and feel that he has missed a real opportunity.
"Conwy and Denbighshire were the first councils in Wales to publicly declare an interest in the potential of a merger and we were the only councils to submit an expression of interest based on the boundaries suggested by the Williams Commission and based on the Minister's own White Paper on local government reorganisation.
"We were committed to developing a full business case for a voluntary merger and this would have looked at issues such as a full consultation and work to align services, in readiness for a new authority. We feel that there was a very strong case for a merger and it was definitely the right approach. We also saw the merger as a way of sustaining and improving services for the future.
"We had also received feedback from the Minister's advisors that the Expressions of Interest for a voluntary merger between Conwy and Denbighshire would be endorsed and that any issues identified would be resolved when the full business case was compiled.
"The Minister clearly has a different map in mind and it would have been fairer to us for this to have been made clear.
"Today's announcement is a shock and clearly we will now need to consider our position."
Leader of Conwy, Councillor Dilwyn Roberts said: “I’ll be very interested to learn in more detail the Minister’s reasons for not supporting the Expression of Interest. I look forward to meeting with the Minister to discuss his vision and latest plans for the future of local government in Wales.”
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