Wallaby work will not get government funding this year, so a "disappointed'' Otago Regional Council will have to reassess its options regarding the pest.
The council, along with the Ministry for Primary Industries and other councils and crown entities, made a joint bid to Government for wallaby control funding, saying it had become a national issue.
The recent Budget did not contain funding for the pest.
Cr Bryan Scott said at a committee meeting last week that anyone who read the Government's decision would be disappointed.
Council chairman Stephen Woodhead said he travelled to Wellington a couple of months ago to push for national funding for the pest.