According to The Daily Telegraph (p16) there has been a distinct government cooling towards PR, which is putting a growing strain on the informal alliance between Labour and the Liberal Democrats at Westminster.
The decision will be a blow to Charles Kennedy, the Liberal Democrat leader, who has made securing 'fair votes' for councils one of the main objectives of his leadership.
He believes that PR in local government would act as a check on town hall corruption in addition to advancing the case for electoral reform at Westminster.
Unveiling a mini-manifesto, Mr Kennedy said that the government needed to bring forward decentralising, liberalising and deregulating measures to counter its 'bossy tone'.
The Queen's speech will contain at least 20 leading Bills reforming welfare, modernising the criminal justice system and updating race relations and anti-terrorism laws, The Telegraph says.