Talks to end the stalemate on the Edinburgh tram scheme dispute have reached a "mutual understanding" of the key issues holding up the project.

All the groups involved in delivering the £545m trams system had been meeting near Glasgow since last week to firm up the framework for their future working arrangements.

This follows a contractual dispute between the tram company Tie, and contractors Bilfinger Berger, which has pushed the project over budget and behind schedule.

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The joint statement read: "City of Edinburgh Council, Tie and the consortium members together with Transport Scotland have had a very constructive engagement and have established a mutual understanding of the key issues that have been impeding the progress of the Edinburgh Tram project.

"The parties to the contract are working together to firm up the framework for our future working arrangements and the successful delivery of the project."

All parties have agreed to meet again in the coming weeks and it is hoped the tram route will be finished by the end of 2013.

(JG)