Talks over a multi-million-pound merger between Kingston and Richmond councils have been suspended.

Staff were told yesterday by email that the Thames Agreement, designed to save both authorities up to £8m each by sharing back-room services, had been put on hold.

It is understood the question of how councillors’ voting decisions would be implemented was a factor in the suspension.

Richmond’s chief executive, Gillian Norton, told staff: “It has not been possible to agree a single, joint management approach which works effectively for both authorities.

“It has therefore been agreed that discussions on the Thames Agreement be suspended.

“The councils will continue to seek opportunities for strategic partnership building on our current successful joint work.

“However, in the meantime both councils will also be free to look at alternative arrangements.

“The need to reduce overall costs remains vital and this will continue to be a key driver as we go forward.

“I realise that this is a disappointment after all the hard work and effort and introduces new uncertainties.”

It had been hoped the agreement would save each authority between £5 and £8m.

The councils already share the Achieving for Children child services company, and Kingston Council merged its IT services with Sutton in May last year.

In March this year Kingston, Richmond, Sutton and Merton were handed £485,000 by Government as a reward for saving cash through sharing services.

Kingston’s Liberal Democrat leader Liz Green said: “All I know is that they could not agree sovereignty, and I’m not surprised. We’ve been saying for some time that this felt like a takeover.

“What they could have been doing over the past six months is looking at efficiencies.

“Instead they’ve been talking about things that we told them straight away were not going to work for Kingston, and now we’re right back where we started.

“It was supposed to save between £5m and £8m, and we’ve still got to make those savings.

“[Kingston Council leader Kevin Davis] likes to make grand statements without thinking through the plans. We always looked at the plans to see what was workable first.

“Now Kevin’s made a grand statement and realised now that it doesn’t work.

“When we worked with Richmond they weren’t grandiose. With Achieving for Children it had been planned for some time, and accelerated by the Ofsted report.

“But it was always clear from very early on that it was an equal partnership.

But Coun Davis moved to counter talk of a collapse, and said the suspension of talks was “no big deal”.

He said: “There’s no disagreement, there’s just some details that we’ve got to work through. Then we’re going to get back together in the new year.

“We have done a lot of work with Richmond.

“It’s a question of how each of us runs our own authorities and how it gets implemented.

“If we don’t share services with Richmond then we would share them with someone else.

“It’s not going to cause us a budgetary issue.”

Kingston is due to announce its budget early next year.