The future of any privatisation plans for Cornwall Council services must be a decision for the newly-elected council of 2013, a key meeting to debate the proposals will hear.
Opponents of the shared services plans, who united this week to topple leader Alec Robertson in such dramatic circumstances, say the joint venture requires a radical rethink.
The shock withdrawal of US giant CSC left BT as the only remaining candidate to secure the lucrative contract, throwing the scheme into doubt.
About 30 members were given a private briefing on the project yesterday, which one councillor said might have swung the leadership vote the other way had members heard the information four or five weeks ago.
Legally, the decision to sign off the deal rests with the ruling cabinet but the council will reconvene next Tuesday to discuss the joint venture, with an implicit assumption that their decision will be carried forward by the new administration.
Liberal Democrat leader Jeremy Rowe said new council leader Jim Currie had been "unequivocal" in his opposition to the joint venture in its current form, when securing their support for his candidacy at Tuesday's leadership vote.
Mr Rowe added: "One of the reasons to support Jim Currie is because he promised to bring the democratic feel back to the council – there is a change in mood with him being elected by the numbers he was. It is possible there may be some merit in shared services and we need to explore that without ruling it out completely.
"I would like to see officers working up a 'third way' option and to put all three options in front of the new council."
A report to the council previously claimed the joint venture contract would save at least £2.5m a year, though there is concern much of the benefits are "front loaded".
Council leader Jim Currie made his opposition clear during the debate this week, calling for the council to control its own destiny, rather than leave it to the City of London.
Mr Currie is currently negotiating with fellow Tories and Independent coalition colleagues in a bid to fill gaps left in the council's cabinet.
Julian German, Chris Ridgers, Steve Double and Graeme Hicks all resigned from the cabinet, one after another, after Mr Currie's appointment.
Mr Currie, who will only be in the post for about six months as he is standing down at the next full council election in May 2013, said: "Business goes on. I hope to fill all the posts as soon as possible, possibly by the weekend."
Neil Burden, the independent cabinet member who lost by three votes to Mr Currie but is now set to become deputy, said CSC had pulled out because of the furore over the issue, though he did not identify the company.
"One of the bidders no longer wants to engage with Cornwall Council because of what happened yesterday," he said.
Cornwall Council later confirmed which firm had quit, adding that it was "disappointed" that CSC had "withdrawn from the procurement for a Strategic Partnership for Support Services".
A spokesman added: "The council is continuing discussions with BT and the debate on the Strategic Partnership is still due to go ahead as part of the full council meeting on October 23, 2012.
Stuart Roden, from the union Unison, said the privatisation plans would not now go ahead.
"To end up with one tender would make it unviable to proceed – for practical reasons I think it's dead in the water," he added.
Mr Rowe said the withdrawal of CSC paves the way for the council to make public information on the bid which had previously been withheld as confidential.
"It should mean that because there is no competition for the bid now, there is no reason why BT shouldn't make public the details of their bid as it is no longer sensitive," he added.
"It is a good opportunity to put the cards on the table and let all of Cornwall know what is planned.
"I have seen the confidential information and it doesn't add much to the debate – the benefits of the contract are front-loaded and give a short-term gain.
"The next council will feel the benefits but people coming after will have to mop up."
Fellow Lib Dem councillor and mayor of Truro Rob Nolan voiced his strong opposition to the scheme after the meeting on Tuesday.
"We have all seen what has happened in local government outsourcing elsewhere," he told Computer Weekly.
He also said that by dismissing Mr Robertson, the wrong person had been sacked. "It should be the CEO Kevin Lavery," he added.
