Crans-Montana has withdrawn its request to be recognised as a plaintiff in the criminal case following the deadly fire at the Constellation bar.
According to RTS, the Valais prosecutor said the municipality could not be considered a victim under the law.
The town had sought civil-party status despite acknowledging failures in its oversight of the venue between 2020 and 2025.
A lawyer acting for the town says the venue broke the law by setting up a smoking room near an exit, blocking another exit and illegally narrowing the stairway.
Crans-Montana officials say they want to be a party to the case, which will allow them access to the files and could permit them to ask questions to the defendants in court.
That will be decided by cantonal prosectors.
Meanwhile, the owner of the bar, Jacques Moretti, has been placed in pre-trial detention for three months.
The council of Crans-Montana says it will not resign despite growing pressure following the New Year's night club fire that killed 40 and injured more than 100.
The battle on whether to build new nuclear power plants is hotting up - the upper house of parliament has voted to go ahead despite the lower house asking the Federal Council for more financial details.