South Ribble Borough Council was unable to agree management restructure plans expected to save £400,000 after the council leader insisted that they must ‘get it right’.
The decision has now been postponed to November so that councillors can reconsider the plan, for which a cross-party group will be established.
Under the proposed plans, more services will be shared with neighbouring Chorley Borough Council.
The council’s £1m plus budget deficit by 2018, rising to £2.6m by 2020, was highlighted earlier this year.
Council leader, Peter Mullineaux, said: ‘We welcomed the report from the chief executive and fully support the restructure proposals.
‘All local councils are facing challenging times and it is vital that we look at the way we operate to continue to deliver the very best services and value for money for our residents.
‘This is a big decision for the council and our staff, and we are absolutely committed to getting it right.’
Last week, Chorley councillors voted unanimously to continue working with South Ribble.