Auckland Regional Council believes the Government has already killed off a regional fuel tax scheduled to take effect in July and that important projects in the region could be in jeopardy.
So far, the Government has confirmed only that it will announce its decision on the tax next week.
The tax is to rise from one cent a litre to five cents a litre over the next three years.
The council says it needs the tax for, among other things, a new fleet of electric trains, and a new electronic ticketing system - but both depend on the tax, which was put through by the previous government.
Regional council chairman Mike Lee says there is great uncertainty over what the scrapping of the tax will mean, and there are even rumours that the Government will shift control of Auckland's passenger rail network to state-owned KiwiRail.
Mr Lee doubts the tender process can be put on hold if the petrol tax gets the chop.
North Shore Mayor Andrew Williams is furious at what he describes as last-minute interference from Wellington over the tax.
Mr Williams says the fuel tax was agreed to by Auckland councils so the rest of the country did not have to pay to fund Auckland's public transport developments.
Transport Minister Stephen Joyce said on Friday that a decision on the tax would be made next week.
Mr Joyce said the Government was looking at ending the regional fuel tax because it feared such a surcharge would add too much to motoring costs.
He expressed concern at the impact of the combined cost of national and regional fuel taxes, saying that in Auckland, for example, the policy would mean motorists could end up paying 14c a litre more within three years.
Green Party co-leader Jeanette Fitzsimons says she does not care where the money comes from, but it is vital that rail electrification in Auckland goes ahead for the sake of the city's future.
Rodney mayor Penny Webster says tolls may have to be used to pay for a road link to Whangaparaoa Peninsula, north of Auckland, if the regional fuel fax is scrapped.
She says the road is desperately needed and would have to be funded through public private initiatives instead.
