LEEDS could team up with the rest of West Yorkshire and parts of North Yorkshire to try and take more control over its own affairs.
Leeds and its West Yorkshire neighbours have invited Harrogate, Craven, Selby and York to submit a joint bid to the Government for powers in areas such as transport and skills.
It is understood that if the four authorities reject the idea, a West Yorkshire-only plan will be presented to the Government.
Talks had taken place over a ‘Greater Yorkshire’ bid bringing West Yorkshire, the whole of North Yorkshire, East Riding and Hull together to take powers from Whitehall.
But a figure close to the discussions said the Greater Yorkshire idea was “finished” and the focus was now on West Yorkshire and its close neighbours, an area known as the Leeds City Region.
Chancellor George Osborne has offered areas the chance to gain more independence over their own affairs and wants initial bids submitted by September 4.
The Chancellor has also made it clear adopting an elected mayor will be a condition for areas which want devolved powers.
It is not expected that the Leeds City Region bid would include an explicit commitment to have an elected mayor at this stage.
Council leaders in West Yorkshire have previously said the Government would have to offer a significant devolution deal before such a major change to the way the area is run is considered.