District councils could be abolished and more elected mayors introduced across England under new plans for a major redesign of local government.

Ministers are set to publish a paper on Monday outlining plans for mergers in areas where there are currently two tiers of local authority – smaller district and larger county councils – in a bid to streamline services.

Elected metro mayors are also set to gain new powers over planning, in a bid to speed up the delivery of new housing and infrastructure.

But the body representing district councils has warned the plans could spark “turmoil” and argued “mega-councils” could undermine local decision-making.

Local government in England is currently marked by a complicated patchwork of arrangements that has changed a lot in recent years.

In some places, responsibility for local services is shared between county councils, which manage areas including social care and education, and district councils, which cover smaller areas and are responsible for services such as bin collections.

Some areas, particularly larger towns and some cities, have “unitary” authorities responsible for both – while the regions surrounding big cities are increasingly covered by multi-council “combined” authorities with greater powers in areas such as transport policy, planning and housing.

The Conservatives created 11 such areas, which have an elected “metro” mayor, and set a target that every part of England that wanted greater powers in some form would get a devolution deal by 2030.

Despite this, around half of England’s population live in an area not covered by a devolution deal.

The Labour government pledged to extend the use of local powers before the election, as a key part of its wider targets to grow the economy and build more housing.

A paper to be published on Monday is expected to set an ambition to move towards unitary councils across all of England, with areas that currently have two tiers being asked to draw up merger proposals.

Streamlining local government will be presented as a way to enable the creation of more powerful local mayors, regarded by Labour as a means to unblock infrastructure and attract greater investment.

Elected mayors would then oversee areas representing two or more councils, and be handed more powers over things such as planning decisions and public transport.

Dozens of district councils could be abolished as a result – prompting some to claim it would deprive people of genuinely localised decision-making.

It would require a series of deals nationwide emulating North Yorkshire, which now has a unitary authority after eight councils were merged together last year.

This would mark a scale of reorganisation that goes beyond what Labour promised in its election manifesto, and mark arguably the biggest shake-up of local government since the 1970s.

The overall timetable and route to achieving this has not been confirmed – and it is not yet clear if the government will use legal powers to force councils together, or hope to encourage them to do so through funding arrangements.

Labour argues the overhaul will make local government simpler and produce savings by making the delivery of services more efficient.

In a speech on Monday, deputy prime minister Angela Rayner will vow to make devolution the “default position of government”, and give councils the powers they need to “drive growth and raise living standards”.

But previous attempts at reorganising local government have led to rows about geographical boundaries and where power sits.

The plans are opposed by the District Councils’ Network (DCN), an umbrella group for such councils, which says there is “little evidence” from past reorganisations that taxpayers’ money will be saved.

Hannah Dalton, vice-chair of the network, said the “creation of mega councils” could prove “the opposite of devolution”.

She also warned the reorganisation could spark a “period of turmoil which will prevent councils from focusing on the local services that drive new homes, jobs and reduce pressure on the NHS”.

A Conservative party spokesman said Rayner’s announcement is part of a plan to “strip councils of their powers” and to impose reorganisation from Westminster “without local consent”.

He said the party recognises more homes need to be built but says that these must be “in the right place”.

“This new announcement will do nothing to solve that – and instead open up another front on Labour’s assault on the countryside.”

The plans, however, have been welcomed by the County Councils Network (CCN), which says its members “now recognise the need to embrace the benefits” of devolution in the face of “significant financial challenges”.

Its chairman Tim Oliver said it had become clear that in many county areas, reorganisation was needed to “unlock” more generous funding from central government and create “more financially sustainable” councils.

Cllr Louise Gittins, chair of the Local Government Association (LGA), said “genuine devolution of powers and resources can play a huge role in promoting inclusive economic growth, creating jobs, and improving public services”.

She said her members were “open to change” but “remain clear that local government reorganisation should be a matter for councils and local areas to decide”.

Monday’s paper is also expected to confirm plans for increased co-operation between councils in planning for transport and infrastructure projects.

Upper-tier councils, including unitary authorities and current county councils, will be required to produce slimmed-down versions of the “spatial development” strategies used to plan for projects in big cities.

Since returning to office in July, Labour has announced four devolution deals: Greater Lincolnshire, Hull and East Yorkshire, Devon and Torbay, and Lancashire.

Combined authorities, including combined county authorities in more rural areas, are more advanced in the north of England compared to the south.

There has been a weaker appetite for devolution deals in swathes of the south-west and East Anglia, where minimum population requirements would also necessitate the creation of larger combined councils.

Speaking on Sunday, Labour’s Greater Manchester mayor Andy Burnham welcomed the plans for his area but said they did not go “far enough” when it came to giving elected mayors more control over skills policy.

He added this was an area driven by local needs, and the “centralising view” of the education department risked “putting a brake” on economic growth.