Councils have until Wednesday night to put forward their preferred merger proposals after an Independent Pricing and Regulatory Tribunal (IPART) report found most of them were unfit to remain as independent councils.

Faced with sharper government rhetoric following the report, many councils have used the four-week consultation period to forge previously rejected merger deals with their neighbours.

Marrickville, Ashfield and Leichhardt councils count among those to have endorsed a merger should the government go ahead with compulsory amalgamations.

But others – such as Mosman, Strathfield, Woollahra and Liverpool – have doubled-down their opposition to any push for amalgamation.

North Sydney has resolved to launch an immediate legal challenge should it be placed in administration pending a forced merger, while Holroyd has threatened injunction proceedings to stymie any bid to "wipe our council off the map".

The position of the City of Sydney, which also opposes mergers, remains unclear. The regulator found that council would be "unfit" using a different criteria, that of a  'global' city.

But if the council was to be judged against those 'global' city standards, the regulator also foreshadowed giving it greater powers – something the Baird government would likely be reluctant to do.

The government has not yet indicated how it would proceed with mergers amid staunch opposition. It is considered to have two options available: Try and pass the laws with the support of a currently unco-operative crossbench in order to allow forced amalgamations; or go through another boundaries commission inquiry, which would take place over the course of next year.

Local Government Minister Paul Toole said the government would respond to IPART's report, "taking into account feedback provided by councils", before the end of the year.

"There's some real momentum building up among councils that are talking and agreeing to come together to provide better services, more infrastructure and downward pressure on rates," Mr Toole said.

"I'm hopeful that councillors will carefully consider the significant benefits of merging and do what is in the best interests of their community."