Shetland bridge settlement to be examined by Audit Scotland
Scotland's financial watchdog is to look into the £4.8m out-of-court settlement made by Shetland Islands Council to Lerwick Port Authority.
It follows a long-running dispute over plans for a bridge across the harbour, which has never been built.
Audit Scotland says it will examine the settlement as part of its annual review of the council's accounts.
A spokesman said: "We routinely cover all material transactions as part of our audit work."
He added that anything significant would be mentioned in the report, which will be available in the autumn.
The port authority was forced to call a halt to its dredging plans for the north harbour in 2005 after the council won an interdict to stop the work.
The local authority had argued that the dredging would damage plans to build a bridge to the island of Bressay.
However, a judge later ruled that the work should go ahead.
The north harbour was eventually deepened at a higher cost than originally planned, but the bridge was never built.
The port, which had to pay compensation to contractors, originally sought £5.85m from the council but an out-of-court settlement was reached.
Shetland MSP Tavish Scott has called for an inquiry.