The government has pulled up short of calling the Steam Packet’s bluff and throwing its revised offer of a new sea services agreement completely out of the water.

While the Council of Ministers recommended that the offer should be ’declined’, Infrastructure Minister Ray Harmer MHK will actually ask Tynwald to note the offer and authorise his department to continue negotiations.

The government is hoping to maintain some flexibility on its stance over what was said to be the Steam Packet’s ’final’ offer.

The Steam Packet has taken out a two-page advert in today’s Isle of Man Examiner to state its case for what it says is an improved offer that is in the best interests of the island.

Next week Tynwald members will be asked to note that offer, submitted in March, and instruct the DoI to ’continue negotiations with the company and to consider all other options for achieving a more effective solution that offers greater benefit to the island’.

That does not go as far as the CoMin recommendation that was contained in the DoI report, which will be laid before Tynwald.

The report states that the March’s offer did not ’provide the island with an effective solution’.

It adds: ’The Department (of Infrastructure) recommends that it be authorised to continue negotiations with IOMSPC with a view to seeking a more detailed and better structured solution and that it be instructed to consider all other options for achieving a more effective solution that offers greater benefit to the island.’

The revised offer by the Steam Packet outlines a series of commitments, including investment in new ships, more discounted travel offers and some increase in passenger and freight capacity.

In return, the company would have exclusive use of the King Edward Pier Linkspan until 2041, with standard prices rising by the greater of either the Manx RPI-J measure of inflation or 2 per cent each year.

Although the Council of Ministers, at first, appeared to want to take a hard-line approach that may be seen as an attempt to call the bluff of Steam Packet bosses, Infrastructure Minister Ray Harmer said the door was not closed on the deal.

Another suggestion made in the report - although not a recommendation - was that Tynwald could effectively confirm the Steam Packet continues as the operator, beyond the expiry of the user agreement in 2026, while allowing negotiations to continue on a new deal in the meantime.

In a statement accompanying the report’s release, Mr Harmer said: ’Although some elements of the offer are worthy of consideration, on balance it is recommended that Tynwald does not accept the offer, but instructs the department to continue negotiating and to consider all routes available for a solution that is in the best interests of the island as a whole.’

Infrastructure Minister Ray Harmer said he was honouring a commitment to the Steam Packet made in Tynwald to make a decision on its offer by July.

But he said ’to be perfectly blunt’ the department was not in a position to make a yes or no decision yet and there now needed to be period of negotation.

He said: ’The problem was that it was a take-it-or-leave-it offer.’

Mr Harmer insisted the vote in CoMin to reject the offer was unanimous.

He said the concerns related to the length of the agreement that would have run to 2041 and whether two smaller boats would be better than a larger vessel and a fast craft.

DoI member Tim Baker said the offer was ’not sufficiently fleshed out and finely tuned’ to be accepted.

Mr Harmer insisted a decision was not being dodged. ’We’ve got to 2026,’ he said.

The report also looks at other options, should Tynwald reject the offer flat out. They include full or partial state ownership, a regulated utility, franchise or government ownership of vessels to operate Manx routes.

In a letter accompanying the Steam Packet’s revised offer to the government, company chairman Robert Quayle and chief executive Mark Woodward, say: ’Our offer represents a cash investment of £120m in vessels, and a further £50m in reduced fare initiatives and increased service provision to both passenger and freight customers to help boost travel and the local economy.

’Of this, more than £100m will be committed in the next 10 years and within the life of the existing user agreement.’

They add: ’We believe the offer we have made is firmly in the best interests of the island. It secures real benefits now for island residents and businesses, in times of real economic uncertainty, and does so at no cost to government.’