The Government is proposing a governance model similar to the Auckland Council for regions that have voted to reject a Super City-like structure.
Under the proposed changes, regions would be encouraged to integrate their core services such as water or transport across council boundaries.
Regions that took a more integrated approach, allowing the Government to work more closely with them, could be in line for a funding "top up" from central government.
Announcing the proposals earlier today, Local Government Minister Paula Bennett said: "Without a doubt there are regions in New Zealand that have got increasing expenditure needed in core infrastructure and looking at it in a piecemeal fashion by council boundaries is not in the best interests of a region as a whole."
This approach did not deliver results for ratepayers or create an environment in which business could grow, she said.
In the past three months, Northland and Wellington have voted against amalgamating their councils.
Mrs Bennett said there had been resistance from communities who were concerned about the potential impact on their identity and way of life.
Government was proposing a "viable alternative to large-scale amalgamation". Regions could transfer some core services between regional and territorial authorities. Or they could transfer them to "arms-length" organisations similar to Auckland's Council Controlled Organisations (CCOs).
Half of CCOs' directors are appointed by the council. Mrs Bennett admitted there could be some resistance to transferring core services to less democratic entities. But she said changes would not be forced on regions, and would be community-led.
The Government planned to introduce law changes next year which would allow the new structures to be "locked in" for the long-term.
The legislation would not affect Auckland, which already had CCOs for tourism, water, transport and other services.
Mrs Bennett said Northland would be a prime candidate for a more integrated approach because it needed significant infrastructure upgrades but collected low rates and had a number of separate councils. She said the region "still has a number of councils which are barely catching up".
If Northland took a more integrated approach, it could receive central government funding to help with infrastructure, she said.
In the past, individual councils within the region such as Kaipara had run into trouble when developing major infrastructure such as wastewater.