The petition, by Bassetlaw MP Brendan Clarke-Smith, had received backing from residents and businesses in the form of 2,500 signatures, many hopeful that more free parking will increase footfall, allowing struggling businesses to recover.
The MP argued that in light of the pandemic and changing shopping habits, action must be taken to protect town centre shops.
But the proposal has been rejected by the council for this financial year because of budget pressures, but has not be ruled out in the future.
Mr Clarke-Smith said: “I would first like to thank the 2,500 constituents who signed my petition calling for one-hour’s free parking.
"I strongly believe we must do all we can to support our high streets and back local businesses.
"Providing free parking is a way of encouraging people to use our town centres.
“I urge the council leadership to reconsider their decision.”
In her letter explaining the decision, councillor June Evans, portfolio holder for finance, said offering an hour’s free parking, would cost the council £187,000 a year in lost income.
She explained that Bassetlaw already offers more free parking than many other councils in Notts, with motorists only been charged between 10am and 4pm.
There is free parking on Sundays and for a month in the run up to Christmas, which altogether annually costs the council more than £130,000 in lost revenue.
Offering an additional free hour would lose the council £54,000 from shopper car parks, and £133,000 from visitor car parks.
Coun Evans added: “This would be a significant budget pressure which would require the council to find savings or cut services to a similar value in the other council budgets.
"The previous 10 years plus of austerity have already many of our services cut to their limit which means that such decisions are not simplistic or easy.”
She said: “We are currently part way through a financial year where a change such as that proposed would have a significant impact upon the council’s finances without the opportunity to fully address the budget impacts.
"For that reason the council is not minded to accept the proposal to introduce and hours free parking in this financial year.
"We will, however, consider it further when we review our car parking strategy and our fees and charges.”