The Conservatives on Lichfield District Council have been accused of turning their back on George Osborne plans for devolved powers.
The controlling Tory group rejected plans to join a West Midlands combined authority earlier this week.
A special meeting of the council saw all Conservative members reject the chance to join.
The gathering of councillors had been called to make a decision over the West Midlands combined authority in time to allow the chancellor George Osbone to confirm the plans in his autumn statement.
But Cllr Sue Woodward, leader of the Labour opposition group, said the Tories had gone against their own party’s wishes.
“This is George Osborne’s devolution deal and now Conservatives at Lichfield District Council have turned their back on what the chancellor is offering to them,” she said.
“This was not about local government reorganisation, it was all about devolving resources from Westminster to combined authorities, so decisions about infrastructure are not taken in Whitehall. But we’re not in that discussion now.
“It seems to me we’ve lost an opportunity for additional investment that might have been there.”
Cllr Mike Wilcox, leader of Lichfield District Council, said a decision not to join was down to concerns over the way powers could be used in future.
“We were not overly happy or comfortable with the governance around the voting for non-constituent members,” he said.
“It was simply the case that joining a combined authority was too big a risk at this moment in time. Other authorities have also decided not to go in, so it’s not as if we’re not on our own.”
But his Labour counterpart said the excuse didn’t hold water.
“We didn’t have these conversations when we joined the local enterprise partnerships and that wasn’t a dissimilar situation,” Cllr Woodward said. “It’s not as if other councils were keeping their cards close to their chests on the combined authority and we risked going it alone.
“I couldn’t see any threats that weren’t going to be threats whether we joined or not. Housing from Birmingham could still be pushed into Lichfield district whether we were in a combined authority or not.
“When you get a bunch of councillors saying we shouldn’t go ahead with this because we don’t know implications, I will have to ask the question about whether they know the implications of every decision in future.
“Councillors often have to go with a best guess forward as you can’t predict the future.”