A delay in shrinking councils from 26 to 11 could prevent the axe falling on unelected quangos which cost Northern Ireland almost £10m a year.
Sinn Fein MLAs argue some of the functions of the unelected bodies could go to local government allowing for a quango cull.
And they have claimed the savings could be used to offset any need to bring in water charges.
Under the Review of Public Administration (RPA) there was to be a complete review of quangos with their powers relocated to local and central Government.
The warning comes as ministers today decide the way forward for local government, and how savings estimated at £428m over the next 25 years can be achieved.
The Executive is then expected to notify the Northern Ireland Office, which is responsible for elections, whether plans for the 11 new merged authorities are to go ahead next year, or the election will be to the existing 26 councils.
The Belfast Telegraph last week revealed senior officials now believe it is not feasible to move to the new authorities within the envisaged timescale of May 2011.
Former Finance chairman Mitchel McLaughlin argued the delayed RPA was another example of “politically motivated interference that holds up reforms that would expedite service delivery and defend our limited budget”.
He said £9.8m was tied up in quangos and while all the money could not be released “if we reduced the number of quangos, we would not have to worry about the cost of water services and the measures that Finance Minister (Sammy Wilson) must address”.
However, Mr Wilson told MLAs: “Even if those bodies did not exist, the work would still have to be done, and, even if they were done away with, the money would still have to be spent; it would simply be governed differently.”