The delay means that if Hosni Mubarak, the Egyptian president, were to die or step down, the ruling National Democratic Party (NDP), would be the only party able to field a candidate for president under the current make-up of Egypt's elected bodies.
The local council elections have taken on greater significance because independent candidates wishing to stand for president under new laws must obtain the support of at least 10 local council members.
The poll delay means that Egypt's largest opposition group, the Muslim Brotherhood, which won enough seats in parliamentary elections last year to field a candidate for president, would no longer be able to do so under the current local council make-up.
Mohamed Habib, deputy leader of the Brotherhood, said: "The NDP wanted to delay the elections to gather themselves. The make-up of the local councils in the current situation... makes the candidate of the NDP the only player in presidential elections."
The Muslim Brotherhood has
slammed the postponement
Egypt's upper house Shura Council, dominated by the NDP, on Sunday agreed to extend the term of existing local council members by two years, pushing back polls which were due this year.
To stand for president, independents must also be supported by members of parliament and members of the Shura Council.
Egypt is due to hold Shura Council elections in 2007 and parliamentary elections in 2010.