Government is unlikely to face any legal action from Norwegian Cruise Lines following its decision to award a contract previously held by the line to a rival company.

Bermuda lawyer Wendell Hollis, acting for NCL, confirmed that the line was reserving its position at present.

But he said: "We would like to do everything to continue to have a good relationship with the Government. It is unlikely we are going to take any action that would affect that.'' NCL lost the Bermuda/New York route after announcing it was to move the Norwegian Crown to a subsidiary company operating in deep ocean.

It came up with two replacement vessels, but Tourism Minister David Allen did not think the ships were of the same quality, size and passenger capacity of the original vessel.

He then reached agreement with Celebrity Cruises, whose Horizon -- which was due to leave next season -- will call at Hamilton and St. George's out of New York.

Celebrity offered a $1.8 million-a-year retail bonus during the five-year deal by pledging to give passengers $50 vouchers for Island shops and restaurants.

But it is understood that NCL never received formal notification that any replacement deal for the Crown was completely finished.

And although they initially offered two possible replacements, the Leeward and Norwegian Sea , insiders believe there was still enough time for NCL to come up with another ship from its fleet.

The Norwegian Crown's contract was due to run until 2004.

Its capacity was around 1,052, whereas the Horizon carries close to 1,374 people. The substitution means weekly cruise numbers could reach around 6,500, with the inclusion of the new Crown Dynasty weekend ship at Dockyard.

Whilst Celebrity Cruises offered the retail vouchers, NCL said they would build a $1.2 million boardwalk at St. George's.