Districts have reacted with disappointment but little surprise to the decision.
The DoE said a lack of Parliamentary time and government borrowing approvals had ruled out a 1997 start date for the unitaries. But the department said it had never promised it would bring in the new councils by 1997.
Association of County Councils secretary Robin Wendt said the decision showed that 'despite our advice, the process of change has been badly underestimated by the government both in terms of cost and disruption'.
Torbay BC chief executive David Hudson said he and his staff were disappointed but not surprised by the decision.
But he said he was confident orders for three new authorities would be debated by MPs before the summer recess, ensuring a 1998 start.
Other potential unitaries affected by the decision include six in Berkshire - being delayed by a legal challenge by the county council - and Herefordshire, where Tory MPs sought to avoid any further electoral defeats so close to a 1997 general election.
The other districts, in Cambridgeshire, Cheshire, Essex, Kent, Lancashire and Shropshire, were subject to re-review by a reconstituted Local Government Commission.
The commission accelerated the reviews in order to give ministers time to set up the new councils by 1997. Now the eight new unitaries planned to be taken from these counties will have to wait until at least 1998.
-- The Conservative chairman of Leicestershire CC, Ernie White, has resigned from the party over reorganisation of the county, which will go ahead in 1997.