Armidale Dumaresq, Guyra, Uralla and Walcha councils have all been deemed "unfit" by the independent local government watchdog to "stand alone" as separate authorities.

Glen Innes Severn and Inverell Shire were deemed fit to remain independent entities.

The report by the Independent Pricing and Regulatory Tribunal found more than 56 per cent of regional NSW councils were assessed as "unfit" to remain stand alone councils.

Councils deemed as such now have 30 days to submit plans to voluntarily merge, with bonus funding held as a sweetener, before the government publishes its final recommendations.

“Premier Mike Baird and [Local Government] Minister Paul Toole were very blunt in their assessment and were disappointed that more councils did not choose to voluntarily merge,” Cr Beyersdorf said.

“I intend to seek urgent and constructive talks with the mayors and councillors of the neighbouring 

councils and propose that we move towards a voluntary merger rather than be forced.

"The IPART assessment has clearly shown that many Councils across NSW do not have the scale and capacity to stand alone. This isn’t going to go away and the Premier today has made it very clear that he will not tolerate Councils dragging their heels.”

According to the report, the state could save $20 billion over 20 years if 60 per cent of councils were merged.

"This ... report shows the situation is now critical and that action is needed to ensure ratepayers get value for money and the services and infrastructure they deserve," Mr Baird said.

The publication follows a meeting held on Tuesday morning between NSW Premier Mike Baird and all mayors.

Cr Herman Beyersdorf will receive a letter later on Tuesday from the Office of Local Government indicating set criteria for the submission.

Full story in Wednesday's Express.