Scottish island councils have moved a step closer to securing a lucrative deal to unlock major new investment.

The local authorities have mooted proposals for a deal which they say will enhance local democracy and allow them to achieve their full economic potential.

The councils and the Scottish Government held talks over the plans at a meeting in Lerwick on Monday 22 February.

It was the twelfth Meeting of the Island Areas Ministerial Working Group (IAMWG) and the final one in the current round of meetings before the Scottish elections.

The meeting was chaired by Derek Mackay, Minister for Transport and Islands, with Marco Biagi, Minister for Local Government and Community Empowerment, also attending for the Scottish Government.

The Ministers agreed to on-going dialogue with the Islands as they develop their proposals.

The group also agreed that it would be important to have engagement from the UK Government as proposals develop.

There were also said to be positive discussions on the potential for increasing local accountability for decisions on Crown Estate assets in the three council areas, ahead of a Scottish Bill on the future management framework for Crown Estate assets in Scotland after devolution.

Scottish Ministers have said they plan to secure the devolution of management and revenue of the Crown Estate so that Scotland and its communities can benefit from the Scottish assets.

Ministers have already confirmed that island and coastal councils will receive the net income from Crown Estate marine assets out to 12 nautical miles after further powers are devolved.

Speaking after the meeting Mr Mackay said: “The Scottish Government is committed to looking at devolving more autonomy to our islands and decentralise decision making to those who live and work in these unique parts of Scotland.

“These meetings provide the opportunity to discuss the best way forward and I am grateful to each of the island councils for their collaborative approach in identifying how best to deliver a vision for inclusive economic growth for their areas.”

Leader of Shetland Islands Council, Cllr Gary Robinson, speaking on behalf of the Our Islands Our Future (OIOF) campaign, said: “OIOF has worked steadily with both governments over the past two and a half years and has made good progress over that time on a wide range of issues.

“We look forward to continuing that engagement as we move into the next phase of our campaign.

“We will continue to contribute to the process of developing a deal for the Islands and welcome the Scottish Government’s commitment to continuing dialogue on that critical issue.

“While this series of meetings has come to an end, the work we’ve started with government will continue on the issues we’ve identified through them.”