A move by Derry City Council to have the city's official name changed from Londonderry to Derry is to be scrutinised by a High Court judge.
The council has been granted leave for a judicial review on the controversy.
A lawyer for the Department of the Environment said they would welcome a final clarification on what had become a "difficult question".
The court may have to view a charter to see if such an entity as Londonderry city existed, a council lawyer said.
Mr Justice Weatherup granted leave for the judicial review at the High Court on Friday.
A Department of the Environment lawyer said the department considered the issue to be "purely a question of law" and involved no particular government policy.
Unionist anger
He said the department would participate in the hearing in a "non-contentious and non-hostile" manner to assist in the court's task of resolving the legal issue.
The official name of the city is Londonderry but the council began the process of changing the name in 2003, despite objections from angry unionists.
The council passed a motion which said Londonderry should not be imposed as the official city name and everyone had the right to use the name with which they felt most comfortable.
The council mounted a legal challenge in an attempt to clear up confusion over the name.
People from a unionist background tend to call the city Londonderry, whereas nationalists refer to the city as Derry.
The case is due to come up for mention again on 29 June but a further hearing is unlikely until after the summer recess.
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