Liberal Democrats on West Wiltshire District Council have refused to throw in their lot with the Conservatives.
The Lib Dems, forced out of office after last month's elections resulted in a hung council, have decided to form an opposition group despite being offered a role in a coalition cabinet.
Lib Dem leader Bob Brice said: "The group decided unanimously they could best serve the people of west Wiltshire in opposition.
"A rainbow coalition sounds fine in theory, but in practice there would be no effective opposition to the council's decisions.
"We believe the opposition has an important role to play in the proper maintenance of local democracy."
The Lib Dems held a majority in the council for many years but the elections on May 1 gave the two main parties the same number of seats, with Labour taking two and independent candidates the remaining four.
Independent Tony Phillips was elected council leader on May 14. He has formed a cabinet including two other independents and four Tories.
He said: "I have tried to create a cabinet that reflects the outcome of the election."
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