The review panel's final report was released by NSW local government minister Don Page on Wednesday, and recommended the Queanbeyan-Palerang merger based on efficiencies to be derived from the "close functional interrelationships" between the adjoining Councils.

Queanbeyan Councillors will attend a workshop next month to discuss the recommendation.

Mayor Tim Overall said an official response was still to be discussed by Councillors, but said his personal view was that local government reform was sorely needed.

"I agree with the very strong statement in the panel's report that in its present form, local government is not sustainable and fit for purpose much longer," Cr Overall said.

"And personally in regards to amalgamations, I urge the NSW Government to reconsider its position in regard to no forced amalgamations as it heads towards the March 2015 State elections.

"If there are to be amalgamations, the NSW Government should really bite the bullet and effect the changes prior to the September 2016 local government elections," he said.

And Mayor Overall said there were some efficiencies to be gained in a Queanbeyan-Palerang merger if it was to go ahead.

"If you consider Queanbeyan and Palerang in one way as a single community of interest in a lot of respects, there's already shared library services.

"And Palerang being a larger LGA geographically has a road and engineering plant which Queanbeyan Council doesn't have ... and we regularly contract in Palerang Council to undertake road and engineering works in Queanbeyan," he said.

However Palerang mayor Pete Harrison said he interpreted the report as suggesting a merger was now less likely to go ahead than at previous stages of the review.

He said the fact Palerang had posted a 'moderate' financial sustainability rating in a recent TCorp audit of councils showed Palerang could now stand alone financially.

"I don't see that [amalgamation discussion] as any different to what's been there before, except that the recommendation has softened somewhat because it's listed in there that it's not to be considered until 2017. Previously it had been suggested that decision be made in 2015," he said.

"As I see it, there's opportunity for us to develop the case we've put to the independent panel, and that's while Palerang did have a difficult start, we've overcome a lot of our problems.

"Financially Palerang is now considered to be in a moderate condition, which is reasonable. So there really isn't the same justification for amalgamation as there was when people were thinking about what Palerang looked like six or seven years ago," he said.

There are 152 councils across NSW, and the sector spends around $10 billion each year, and employs some 50,000 people

Local Government NSW, the peak body for the state's councils, has called on the government to extend its March 7 consultation deadline for the report until the end of April.

President of LGNSW, Cr Keith Rhoades, said the vast majority of NSW councils do not have their first council meeting for the year until February, leaving little time for them to properly respond to the report.