Cornwall councillors have knocked back recommendations from leaders to create a local scheme to help the poor pay their council tax bills.
From April the Government will end the national scheme of council tax benefit, leaving councils to devise their own initiatives.
In a narrow vote yesterday at a full meeting of Cornwall Council at County Hall Truro, councillors voted 43 against and 37 in favour of recommendations from the cabinet to establish a local scheme.
Under the recommendations every household would have paid at least 25% of their council tax including the poorest homes.
However, councillors argued the measures would hit the poorest hardest, pushing struggling families further into poverty.
Councillor Joyce Duffin, said: "Child poverty is something we have spoken about in this chamber. I think it's appalling we are even discussing this today."
The council has until January 31 to reach a consensus on how to tackle the issue.
If agreement is not reached the Government will impose the so-called "default scheme" meaning the council will have to fund the current system at a cost of £4 million.
The stalemate means the matter will be deferred and will be back on the agenda on Monday at the next cabinet meeting.
It will also have to go back in front of the full council at some stage.
The debate was further complicated because a number of councillors had to leave the chamber and were unable to vote because they had an interest in the subject.
They had to leave because they knew of family members in receipt of council tax support.
When other councillors protested over the exclusion of colleagues, chairman Pat Harvey stepped in.
She reminded the chamber full council had agreed to members with an interest in an agenda item being excluded from debates under the code of conduct.
Councillor John Wood, Independent, argued in favour of deferring the council tax benefit decision.
He said: "The debate was interesting but there was a lot of divided opinion and confusion. We need time to reflect and deferment is the only way forward so we can reach a consensus."
Jim Currie, council leader, said reaching an agreement was a matter of urgency.
He said: "At the cabinet meeting on Monday we will have to tie this up one way or another."
Also on the agenda was the matter of appointing an interim chief executive while efforts are made to fill the post permanently.
The move comes in the wake of the resignation of the current chief executive, Kevin Lavery.
Some councillors questioned whether or not there was a need for a chief executive at all.
Councillors voted to have a debate and to leave the final decision to the new council following the elections in May.
