Speaking at a neighbourhood renewal seminar, Mr Sinclair said the Kerley report into widening access to local government has been 'shunted to the side track'.
He said: 'Ministers really cannot have it both ways. Those who say they are unhappy about the capacity of parts of local government to deliver need to come to terms with the fact that they are collectively delaying measures to improve that very capacity.'
Deputy local government minister Peter Peacock said the proposals in the Kerley report, which include fewer councillors and proportional representation, were still being considered by the Executive.
Mr Sinclair said the Scottish Parliament's promise to modernise local government has become muted and ministers are no longer sure about how to modernise or when modernisation should be introduced.
He said the Executive had failed to link national and local priorities and called for a model similar to that in Wales where the Welsh Assembly and Welsh Local Government Association have an agreed set of policy objectives.
A spokesman for the Executive said: 'To help local government modernise, the Scottish Executive has provided a three-year financial settlement, promised new powers of community initiative and for community planning and provided additional funds .'