In doing so, it determined the operational scale, scope or capability of Auckland Council would be materially affected if local government in the North Rodney area were to be reorganised as proposed by NAG.
NAG chairman Bill Townson told The Aucklander he didn't believe the commission made the right decision by including all of the Auckland Council area as affected.
"We're 1.6 per cent of the population," he said. "How does us pulling out materially affect the operation of Auckland Council?"
As that decision stood, Mr Townson said the opportunity existed for other disaffected communities to piggy-back on the decision and seek to withdraw from the Auckland Council.
The commission will now call for alternative applications. These are other suggested local government arrangements relating to the Auckland Council area, which can be made by any person, body or group. It will then decide on its preferred local government option.
If the preferred option is not the status quo, the commission will then begin developing a draft reorganisation proposal before consulting further and gauging public support for it.
"The commission will be inviting ideas and suggestions from people and parties interested in local government in the Auckland Council area," said Commission Chair Sir Wira Gardiner. "We look forward to receiving and considering these."
No More Rates campaigner David Thornton said the Local Government Commission has thrown the doors wide open for a total re-appraisal of the governance, management and operation of the first Super City in New Zealand.
"Tens, if not hundreds of thousands of ratepayers, and residents, have, almost from its inception, expressed anger and frustration at the lack of democracy, accountability and honesty in the way Auckland Council has behaved towards it citizens," Mr Thornton said.
He said ratepayers in the North and East have, and continue to, subsidise expenditure in the City Centre and the South and West.
"The result of the Rodney Hide experiment has been a failure of elected members to manage a local authority of this size.
"While a major re-organisation may seem a daunting task, the commission has invited us all to have our say, and if changes are necessary they must be made."
Mr Townson said the clock was ticking on any proposed change as Local Government Minister Peseta Sam Lotu-Iiga planned law changes for October, which had the potential to put the group's aspirations "back to square one".
Northern rift
• The Local Government Commission received an application from Northern Action Group (NAG) for the constitution of a North Rodney Council as a unitary authority separate from Auckland Council in November 2013.
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• On 30 June 2014, the Commission declined to assess the application principally on the grounds that to do so would not be in the public interest.
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• NAG appealed to the High Court and, in April 2015, the High Court said the Commission was wrong in law on the public interest ground.
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• In August 2015, having received and considered further information from NAG, the Commission decided to assess the application.
An explanation and summary of the Commission's reasons can be found at www.lgc.govt.nz
