Secretary for Transport and Housing Eva Cheng said: 'We are to conduct a review on the outlying island ferry services, with a view to enhancing the long-term financial viability of the services and maintaining fare stability.

'The present mode of operation does not seem able to be sustainable. In the future, we shall ask for more eco-friendly fuel for vessels and maybe more eco-friendly vessels. It will pose more challenges to the operators. We see that there is a need to have a deep review of the services.'

The bureau would start consulting the sector soon and the review would take about two years.

Nelson Ng Siu-yuen, director and general manager of Hong Kong and Kowloon Ferry, said the present system of opening ferry routes to new bids every three years should be scrapped.

Mr Ng said his company had already tried to increase sources of income by running night tours around Lamma Island and running kiosks at piers.

'But three years are too short a period to contemplate long-term investment,' Mr Ng said. 'If the government can lengthen the licence to, say, 10 years, it can attract more upscale business investment.'

Similar views were expressed by New World First Ferry Services. A spokeswoman added the group was pleased the government was seeking to provide operators with extra retail space at the Central piers.

Kwok Ping, of the Lantau Island Residents' Association, also agreed a 10-year term was suitable, but proposed an interim review during the fifth year to ensure quality of services.

Andrew Cheng Kar-foo, who chairs the Legislative Council's transport panel, asked the government to buy ferries. 'As a long-term measure, the government may consider hiring a fleet of ferries and outsource the operation of the services to outlying islands.'

A bureau spokeswoman said it would 'not rule out any options', although a government takeover was against government policy.