Pentland Ferries subsidies ruling being appealed

A ferry firm is appealing against a ruling that Scottish government subsidies to a rival are lawful.

Three companies tendering for the £370m contract for services between the Scottish mainland and the Northern Isles were revealed in February.

Lawyers for Pentland Ferries told the Court of Session the Scottish government was acting unlawfully. Lord Boyd of Duncansby dismissed the case.

Pentland Ferries said there was no option but to appeal.

A separate referral to the European Commission, claiming the subsidies breach EU competition rules, is continuing.

In 2012, ministers awarded a six-year contract to Serco.

The three companies tendering for the new eight-year contract are CalMac Ferries, Förde Reederei Seetouristik GmbH and Serco NorthLink.

Pentland Ferries currently operates a service between Caithness and Orkney.