The paper, which will set out options for potentially radical reform of both the revenue and capital aspects of the local government finance system, was due next month.
But with chancellor Gordon Brown's comprehensive spending review scheduled for mid-July, it is now almost certain that publication of the green paper will be delayed. The spending review will dominate the rest of July because Mr Brown's announcement will be followed by individual statements from spending ministers.
One of the problems with publishing the green paper in August is that Parliament will already have risen for the summer recess. But waiting for MPs to return to Westminster would delay the green paper until mid-October.