A request for resident-only parking on Church Street had been made to Wooler Parish Council.
However, members felt it was important to keep as many parking spaces as possible in the town centre for others.
Coun Mark Mather, parish council chairman, said: “As a parish council we have already acknowledged that there is a parking issue and it’s only going to get worse.
“We are trying to relieve the problem with the school farm field which will act as an overflow car park on event days but to turn a through road into residents parking is not something the parish council would want to take forward.”
It was noted that the conversion of a dairy into homes and the former police station into a bed and breakfast had resulted in more cars on the street.
However, councillors felt that resident-only parking would shift the problem on to neighbouring streets.
Coun Mather also called on the county council to consider parking carefully when examining applications for new homes in the town.
Coun Anthony Murray added: “We are not going to create any more room in the town centre. It would be a great pity to limit parking in the town centre when people are wanting to come in and spend money but can’t get parked.”
The county council is planning to increase the parking limit on the High Street from 45 minutes to two hours.
“Hopefully the increase the times on the High Street might help a little bit,” said Coun Mather.