Vale of Glamorgan council had refused planning permission for test drilling at Llandow in October 2011 on the basis of groundwater contamination concerns raised by Welsh Water.
Officials and councillors expressed annoyance that the water company decided not to attend an appeal hearing, after prospectors Bridgend Coastal Oil and Gas apparently allayed its concerns.
The council had expected the water firm to provide technical support to its case for blocking the controversial fracking plans.
There were calls for formal policy from Cardiff and Westminster to help local authorities decide such issues.