The four Welsh police authorities risk missing out on funding if they do not agree to merge voluntarily, Welsh Secretary Peter Hain has warned.
Charles Clarke says a merger is the best way to police Wales
Mr Hain said the Home Office had allocated £125m to help pay for police mergers across the UK.
Home Secretary Charles Clarke had given the police authorities in Wales until Friday to agree to a single force.
But all four have rejected the plans, citing concerns about the speed of change, funding and community policing.
Mr Hain told BBC Wales there was a "danger" of the Welsh police authorities missing out on financial incentives.
Commenting on funding for the mergers, he said: "There is money up front. It has been provided.
"It may even be possible to increase it if there's serious negotiation, but if the authorities sit on their hands and refuse to do anything then the Home Office and the Government is left with no alternative but to legislate.
"I don't think that's in the interests of policing in Wales."
Mr Hain also urged the authorities to negotiate with the government.
He added: "The best way to get the best deal is to go in and negotiate, not to sit back and refuse to do so. So that's my best advice to the police authorities.
Geraint Price-Thomas, who chairs the Gwent Police Authority, has said the pace of reform is causing the greatest concern.
Mr Hain urged the police authorities to negotiate
The Gwent authority was the last in Wales formally to reject the voluntary merger at a meeting on Thursday.
But Mr Clarke has said a single force is the best way to police Wales.
Mr Clarke has the power to force through the mergers after a four-month consultation period, beginning on 1 March.
Mr Price-Thomas has said he would keep talking to the Government through this period but felt the position had to be made clear.