It is by no means inevitable that Blackpool and Blackburn will be wrested from Lancashire CC's control after a fresh review of local government structure, the high court heard.
Stephen Richards, for environment secretary John Gummer, said the Local Government Commission's neutral role had in no way been undermined and it would approach its task with an open mind.
Mr Richards was defending the government against Lancashire CC's claims that new policy guidance issued to the commision in June makes independent unitary status for Blackpool and Blackburn virtually a foregone conclusion.
But he had left it to the commission to make its own independent mind up as to whether unitary status for any of the 21 districts under review was the best option.
Each district was to be looked at 'on its own facts' and Mr Gummer's expression of his own beliefs did not mean that the outcome of the review had been 'prejudged'.
There had been no change to the statutory criteria that the outcome of the review should reflect local identities and promote effective and efficient local government, Mr Richards added.
And it was entirely legitimate for Mr Gummer 'to point out what he suggests is the best way to achieve the objective and to suggest how different factors might be weighed in relation to one another'.
'To guide someone is to lead, steer or point someone in a particular direction. It is legitimate for the secretary of state to say that his belief is that unitary authorities are in general more likely to fulfill the statutory criteria than a two-tier system'.
Mr Richards added: 'The guidance does not determine the outcome of the review; it does not preempt the LGC or narrow the scope of the review'.
He dismissed Lancashire CC's claims that the guidance had reduced the importance attached to public opinion in favour or against change.
'The need to take account of local opinion is acknowledged. The guidance advocates an intelligent approach to assessing community identity. Local opinion is only one element of community identity.
'The guidance is balanced and sensible. Short term disruption may be outweighed by long term benefit'.
Mr Gummer also appreciated that smaller local authorities might cause problems with local services, but the guidance had 'urged the LGC to keep an open mind in view of the statutory objective', said Mr Richards.
The guidance merely 'pointed to the possibilities for consideration' and left the LGC to make its own decision as to the appropriate recommendation in each case.
The LGC, after its first review of local government structure throughout England, had in many areas recommended abolition of county councils and their replacement by smaller, independent unitary bodies.
But, in Lancashire's case, the LGC had in October last year recommended that there should be no change to the existing two-tier structure in the county.
Lancashire CC thought it was to be left alone to rule supreme over its 14 districts, but that was before Mr Gummer ordered a fresh review in June.
The commission has been directed to review again the cases of 21 metropolitan districts in 12 counties - amongst them Blackpool and Blackburn - to see if they qualify for unitary status.
Lancashire CC claims that Mr Gummer's policy guidance which the LGC must take into account when conducting the new review is 'skewed and slanted' in favour of the government's 'hoped-for' outcome - the creation of more unitary councils.
The hearing continues.