NorthLink won the contract in October 2002

They are Caledonian MacBrayne, Irish Continental Ferries and V Ships UK. The new deal starts in April 2006.

Meanwhile, the SNP said the auditor general should investigate the amount of public money spent on subsidising the present NorthLink service.

More than �63m, nearly twice the agreed figure, has been given to NorthLink since it took over in 2002.

The SNP's deputy transport spokesman Brian Adam MSP said the expense did not represent value for money.

Preferred bidder

The decision to re-tender the services to Orkney and Shetland was taken early after NorthLink, a company jointly owned by CalMac and the Royal Bank of Scotland, said it was unlikely to be able to complete the existing contract on the originally agreed terms.

Transport Minister Tavish Scott said: "Once the bids have been carefully evaluated, we hope to announce a preferred bidder early next year."

The three passenger and vehicle vessels currently serving the route will transfer to the new operator.

Mr Scott said the specifications included a reduced tariff for freight on the Aberdeen routes, improvements to the timetable and livestock and general freight in the new contract.

A separate scheme is being prepared to provide assistance for load-on load-off shipping to the Northern Isles.

RBS withdrawal

The Royal Bank of Scotland has decided not to continue its involvement as a shareholder in NorthLink beyond the current contract.

This means that the company as currently owned cannot be the new operator and under the procurement rules its bid is unable to continue.

In a statement, NorthLink said: "If successful, CalMac will therefore proceed as the sole shareholder of the new operating company with the successor to the current NorthLink business continuing under its own management and infrastructure."

NorthLink chief executive Bill Davidson said the announcement would have no effect on employment or current operations.