It came after the state government, in a shock move last December, back-flipped from its push for a merger between Maitland and Dungog and instead recommended that Dungog join forces with Gloucester Shire Council, which also had significant financial problems.

The finding that Maitland did not meet all of the criteria to remain a stand alone entity, which meant it was a classified as an unfit council, attracted fierce criticism after an independent analysis found that Maitland should have ticked all the necessary boxes.

But in a report to councillors tabled at Tuesday’s meeting, general manager David Evans noted Local Government Minister Paul Toole officially informed Maitland council that it had been reclassified as fit for the future.

Mr Evans wrote that Maitland would continue to be involved in local government reform initiatives where appropriate, such as the Hunter Pilot Joint Organisation initiative.

“We will continue to improve our financial sustainability, support initiatives to strengthen local leadership and provide input where appropriate to improvements to the legislation, financial systems and accountability mechanisms under which the system of local government in NSW operates,” he wrote.

“Council can now ­continue its focus on productivity improvement and the ongoing maintenance and enhancement of the services it provides to the Maitland community.”