Troubled clinical software provider to the National Heath Service (NHS) £12 billion transformation programme, iSoft has said it will not take legal action against CSC for blocking its proposed takeover by IBA.

As the main IT systems integration contractor working on the NHS National Programme for IT (NPfIT), CSC refused to give consent for the go-ahead of a £140-million offer made by the Australian healthcare firm, IBA to buy iSoft last week.

In response, iSoft and IBA had threatened to take legal action.

In a statement issued yesterday, the ailing software provider said: "iSoft continues to seek CSC’s consent to the change in control. While these discussions are in progress, iSoft and CSC have agreed temporarily not to take further steps in court in relation to proceedings."

IBA revealed its intentions to bail out iSoft, as a key NPfIT software provider during the middle of May - the UK software company could otherwise face bankruptcy as a result of irregular accounting practices, under investigation by the Financial Services Authority.

CSC has since said it had looked at buying the software provider itself, as the delayed Lorenzo care records system iSoft develops is central to NHS plans to update its IT systems and centralise patient records.

Analysts had predicted getting the blessing of CSC would be difficult for the deal, and the IT services company has since said it wants to increase the numbers of its own staff working inside iSoft.