The tendering process into the controversial Virgin healthcare bid will now be re-run following a High Court ruling.
Last month the High Court ruled that Lancashire County Council had not correctly followed the tender process when deciding to award a £104m contract for healthcare to Virgin.
Now the County Council has announced that it will re-evaluate the bids - and will also pay £200,000 in legal fees to the NHS trusts that challenged the bid process.
The services, which include health visitors and school nurses, were subject to a legal challenge by Lancashire Care and Blackpool Victoria NHS trusts - which previously held the contracts.
Following a hearing in the High Court in London in April, Mr Justice Stuart-Smith set aside the decision to award the contract, and severely criticised the council's processes.
the council has now decided that it will keep the existing bids for the contract, but the scoring and moderation stages will now be re-run with a new independent panel, which will make the decision over who will be awarded the contract.
The county council has also agreed to make a payment towards the health trusts' costs for the legal challenge. Although the total costs for the case are still being finalised, it is anticipated that the figure Lancashire County Council will need to pay will be in the region of £200k which would be around 75 per cent of the total costs.
County Councillor Shaun Turner, cabinet member for health and wellbeing, said: "We will now be able to move forward to finalise this procurement process and we have also agreed to pay 75 per cent of the trusts' legal costs for this case, which will mean we do not have to go back to court.
"Where services such as the 0-19 public health services are not being delivered in house, we are under a legal duty to open them up to competition; and the decision to do so in this case was in no way political.
"The existing contract with LCFT and BTHT does not expire until March 2019 so the public can be reassured that there will be no disruption to these important services.
"Health visitors and school nurses all do a fantastic job and we will continue to support them in any way we can to ensure children and families continue to receive a good service."