COUNCIL house tenants in Wrexham have voted against the proposed transfer of their homes and have decided to stay with the council.
But council chiefs have warned that the 'no' vote could lead to job losses, service cuts and rent increases.
More than 13,000 tenants were asked whether the ownership of their council houses should be transferred to Tai Wrecsam, a not-for-profit organisation.
And despite Wrexham Council's well-publicised admission that it does not have the cash to modernise the properties, 58.82% of the 9,777 tenants who voted said 'no' to the proposed stock transfer.
Responsibility for bringing the houses up to the standards demanded by the National Assembly by 2014 will now remain with the council.
After the result was announced on Friday afternoon, there were angry scenes outside the Guildhall as transfer supporters confronted Wrexham Against Stock Transfer (WASTe) chairman Chris Maher.
Leader of Wrexham Council Shan Wilkinson said she was disappointed with the result, but said it was a 'vote of confidence' in the council's housing service.
'We must respect the wishes of the Wrexham people and we will try to do our best to provide what services we can given the budget available,' she said. 'But there are hard choices to be made.
'It was essential that tenants were given the choice about the future of their homes and services.
'The ballot result indicates that tenants still have a high degree of trust and confidence in the council. It is now our job to plan for the future.'
Council bosses say they now face an uphill struggle to modernise the properties, which need a £274m facelift over the next 10 years to meet the Assembly's requirements.
Strict borrowing restrictions set by central Government mean the council can only invest about £5m on maintenance and improvements, but transfer supporters said that Tai Wrecsam would not be subject to the same borrowing restrictions which would have freed up millions to bring the homes up to scratch.
The council must now find the £274m themselves, with a further consultation with tenants set to take place to decide how the money will be raised.
Cllr Wilkinson added: 'There is no magic wand to bring in the extra money and we are going to have to face tough choices which may involve council rent rises, service cuts or both.
'We will be talking to tenants to see if they would prefer service cuts or rent increases.'
Deputy leader Alun Jenkins added: 'The council has to find £274m by 2014 but has only £70m. That leaves a £200m shortfall.
'The odds are stacked against us. The message of how dire the consequences could be if stock transfer did not go ahead was obviously not received, and we will now be millions of pounds in debt for the next few years to try and maintain standards.'