The multi million pound contract to operate ferry services between Aberdeen and the northern isles has been extended by three months.
This follows further engagement with the European Commission over the on-going complaints from Pentland Ferries.
Serco NorthLink was selected to continue the ferry service between the mainland and the islands for passengers and freight as part of a six-year £450 million deal.
But this came up against complaints from its competitor.
The extension will ensure continuity of the service in the short term. It will also allow the process with the European Commission to be concluded before the award of the next contract.
Serco remain the preferred bidder for the next contract to operate the Northern Isles Ferry Services network.
Islands minister Paul Wheelhouse said: “We need to engage further with the European Commission about the on-going complaint from Pentland Ferries and resolve any outstanding issues.
“The extension will allow us to conclude that engagement before signing the new contract with Serco NorthLink Ferries, as well as giving ferry users continuity of service in the short term.
“It’s important to stress that will have no impact on the Scottish Government’s commitments around reduced cabin fares and the three year freeze on islander fares.”
The Scottish Government’s decision to award the contract for Northern Isles ferry services to Serco was called into question during a debate at Holyood last month.
Transport spokesman for the Greens, John Finnie, challenged Mr Wheelhouse about the decision to hand control of the route to the Hampshire-based outsourcing giant for at least six years.
Mr Finnie said the company was responsible for “mass evictions” of asylum seekers in Glasgow and asked if the firm deserved to receive public money.
Mr Wheelhouse defended the decision and claimed Serco had won the Northern Isles contract “fair and square”.
The current contract with Serco NorthLink Ferries Ltd was due to run until October 31 2019, but will now be extended for three months until January 31 2020.
From January, Orkney and Shetland islanders will be able to enjoy a 20 per cent year round discount on cabin fares on Aberdeen-Kirkwall-Lerwick routes.
They will also enjoy a three year fares freeze for passengers, non-commercial vehicles and cabins on those routes.
The new Northern Isles contract will see 10 cabins upgraded to a premium level, a full refurbishment of the terminal lounge at Hatson, earlier boarding at Aberdeen Harbour and extended opening hours of North Link’s customer services centre.