Dumfries and Galloway Council is set to drop plans to seek a judicial review after proposals to close a school were rejected by the Scottish Government.
Plans to close the small school were rejected
The closure of Glentrool Primary - where it was claimed pupil numbers were set to fall to four - was vetoed by Education Secretary Fiona Hyslop.
The authority was considering taking legal action against the decision.
It now intends to keep the school open for the current academic year pending the outcome of a community review.
The council had agreed to close the school but because the closest alternative primary was more than five miles away it had to seek ministerial approval.
When that was not forthcoming the authority's director of education Fraser Sanderson said it left the region's school review process "in tatters".
Now a paper to go before councillors confirms that a judicial review will not be pursued.
However, it warns the costs of keeping the school open for 2007/08 are about £96,000, putting extra pressure on education budgets.
"The inability to close Glentrool Primary School increases the risk of the service being unable to meet its savings targets since a rationalisation of the school estate would be one way of reducing current levels of spend," it states.