Southland's three territorial councils have formally endorsed extending Southland disAbility Enterprises' contract to manage the region's recycling for another 12 months.

WasteNet spokesman, Southland District Mayor Gary Tong, said the terms and conditions of the extension have stayed the same from its previous contract with the not-for-profit company.

However, the councils would pay approximately 10% more than the existing agreed fee. 

Recycling has become highly contentious in the deep south after SdE publicly disclosed last month that had been told it was no longer the preferred tenderer for recycling services in Southland when its contract with WasteNet expires this month.

Doing so broke confidentiality in the ongoing contract negotiation process with WasteNet.

SdE employs 110 people, 82 of whom have a disability.

"People have got to realise that these negotiations started many months ago, so it came down to the wire. It's just so pleasing that we were able to get in the room with the [SdE] board and work through this," Mr Tong said.

However, the extension does not offer any guarantee that SdE will be given another shot at a long-term contract, having already been ruled out during WasteNet's assessment of the tenders received.

Mr Tong said negotiations between WasteNet and another party identified as the preferred tenderer for a long-term recycling contract remained "very much alive", he said. 

"The preferred tenderer is very much still the preferred tenderer," Mr Tong said. 

While the Southland District Council and Gore District Council this month voted in favour of WasteNet's recommendation to award the contract to the preferred tenderer, the Invercargill City Council voted against it, in what came to a close vote. 

That meant it was back to the table for the three councils.

"The guts of it is that it's actually put the pause button on it. We can't move forward or backwards in regards to this. So the tender is still very much alive," he said.

"We just need to get everybody back in the room and work through what it is that the ICC councillors need to understand for them to either agree or disagree again [with the WasteNet] recommendation."