The State Government has been forced to defend its handling of council amalgamations on two new fronts, including a claim by the Local Government Association of Queensland that the process of merging shires will cost councils $200 million.

And the Nationals claim that a legislative bungle by the Government means the State still has the power to sack councils which hold plebiscites on forced amalgamations.

But both claims have been rejected by the Labor Government as arbitrary and misleading respectively, with councils neither to receive any extra financial assistance from the State, nor face the sack if they hold referenda on the controversial issue.

The Government has allocated $27.1m to assist councils with the transition to amalgamated shires ahead of next year's March elections, but LGAQ executive director Greg Hallam estimates the real cost will be in the order of $200m.

While acknowledging the figures were a rough estimation, Mr Hallam said they have been extrapolated from feedback from councils during a recent three-week tour of 11 regional areas.

They include projected expenditure on computer and communication system upgrades, moving to centralised administration, and changing the badging of everything from street signs to letter heads for the new council areas.

And being prevented from cutting costs through staff reductions, Mr Hallam said the only option for councils would be to cut back on infrastructure and service delivery, as was the case after the council mergers in Victoria and South Australia.

"We're going to have a lot of pain for very little gain," Mr Hallam said. "We think the State Government should pay that bill."

But that idea has been rejected by the Government, with a spokesperson for Local Government Minister Warren Pitt saying its current $27.1m funding for transitional expenses was in line with the original requests of the LGAQ.

He said the LGAQ should not confuse transition costs with those that would ordinarily be incurred by councils, regardless of amalgamations.