Erewash could be isolated by a council decision to stay out of a combined authority – a move which could mean “throwing away millions in investment”.
At the full council meeting at Ilkeston Town Hall councillors decided against the motion to join a united authority for Derby and Derbyshire by a margin of three votes.
Labour party opponents accused the Tory-led council of “turning their backs” on millions in local investment, from a plan aiming to devolve more power from central government and bring more funding to local councils.
Labour leader Alex Phillips said: “Last night they demonstrated just how out of touch they really are with the need for investment in our borough. It was definitely a case of self-interest and politics with a very small ‘p’.
“Conservative leaders up and down Derbyshire and Nottinghamshire voted in favour of a Combined Authority.”
The Tory leader also voted against his own motion, he added.
“So much for a Northern Powerhouse – it would seem that Erewash is an economic wasteland under Conservative rule.”
Leader of the council, Conservative Chris Corbett, said that essentially voters chose to protect Green Belt land from potential development.
He added: “Joining would mean handing some powers over, and housing was one of the powers that the combined authority would have taken from us.”
While all other councils who have voted on the proposal support the combined authority, Cllr Corbett said Erewash was in a unique position.
He added: “The council already works closely with Nottingham and Nottinghamshire on key areas of economic development including housing and transport.
“It would not make sense for the council to align itself with one Combined Authority as this could impact on the economic prosperity of the borough.
He added: “I do wish that local Labour politicians would stop trying to drag down Erewash, it’s a great place to live with lots of green fields, as well as manufacturing and employment.”