Northamptonshire County Council had been handed £4m from the Department for Education's children's social care innovation programme to help launch an independent trust to run children's services.
A limited company, called Children's First Northamptonshire, has been set up to develop the new organisation ahead of a planned launch in April 2019.
However, councillors have put the plans on hold due to uncertainty around the future of the council.
A council report on Children's First Northamptonshire states: "Given the uncertainty of the future governance arrangements across Northamptonshire and possibility of there being two new unitary authorities it would be premature to continue with the development of an ADM (alternative delivery model) for the delivery of Children First Northamptonshire services at this time."
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