Lancashire CC has suffered an expensive defeat in its legal bid to stave off the threat of Blackburn and Blackpool being wrested from its control.
The county council had challenged new policy guidance issued by environment secretary John Gummer to the Local Government Commission.
The council claimed that by making his 'hoped-for result' of the review plain to the commission, Mr Gummer had made it virtually a foregone conclusion that Blackpool and Blackburn would achieve independent unitary status.
But the restructuring saga is still not over as the judge granted Lancashire leave to appeal against his ruling.
'In my judgement no fair reading of this guidance could lead to the conclusion that the secretary of state was seeking to enforce a particular unitary solution on the districts involved in this review,' said the judge.
He also dismissed claims that a shortened timetable imposed by Mr Gummer for the new round of reviews of 21 districts in 12 counties 'demonstrated the government's determination to achieve its own wishes.'
The judge said: 'The short answer in respect of the timetable is that the involvement of the commission is much less onerous in this review than in the earlier one, and far less wide-ranging.'
Lancashire claimed the commission's neutral role had been undermined by Mr Gummer's expressed preference for more unitary authorities to replace existing two-tier systems.
But the judge said: 'Having reminded myself that I am considering the guidance as a whole rather than as individual phrases, sentences or paragraphs, I am satisfied that the guidance does not improperly interfere with the commission's function, in particular by acting to detract from the statutory criteria.
'Nor does it, in the guise of purported guidance, provide an unacceptable direction about the outcome to which the commission should come.'
Lancashire CC initially thought it had been left to rule supreme over its 14 districts when the commission recommended last year that the county's existing two-tier structure should be retained.
But Mr Gummer ordered a fresh review of 21 metropolitan districts in June this year - with Blackpool and Blackburn amongst them.
Outside court the county council's deputy clerk, Max Winterbottom, said: 'We believe there will be financial turbulence if one or two unitary districts are created. There will be a loss to the strategic mass of the county council, and we believe there will be a fragmentation of services.
'We think there will be disruption which will continue for a long, long time. But most importantly there will be an increase in costs.
'We estimate it will cost £4m to set up two unitary authorities, if there are to be two unitary authorities in Lancashire.'