Plans for congestion charging in the East Midlands have been scrapped after councils disagreed on a way forward.
City and county councils from Leics, Notts and Derbys met to discuss a report which said charging could cut congestion across the region.
But Derby and Nottingham city councils rejected the idea, derailing any chance of a regional approach.
Nottingham council said the charge is unfair and is pushing ahead with the idea of a work place levy.
A report published last month - at a cost of £1.8m - suggested a £2 peak-time cost, to start in 2016.
It was hoped this would reduce traffic by 30% and bring in millions of pounds to improve the road structure.
The authorities had been meeting to apply for another £3m to continue research.
The congestion charge's collapse has upset those who had backed the plan.
Councillor David Parsons from Leicestershire County Council said: "The city of Nottingham have been so intransigent that the bid will not be proceeded with.
"Our view is that we need to look at congestion in the East Midlands and particularly in the cities and Nottingham has effectively scuppered that."
But councillor Jon Collins from Nottingham City Council said a congestion charge was not right for his city.
"We don't think it is fair and we are working towards a work place levy which we feel is a better way of funding the sort of improvements in public transport that will get people out of their cars."
Early proposals for the levy suggested a starting rate of £185-a-year in 2010, rising to £350 by 2014.
Some employers have said the levy would make them reconsider being located in the city.