Portugal's new left-wing, anti-austerity government announced it was moving to halt the privatisation of transport systems in Lisbon and Porto, a measure introduced by its right-wing predecessor.
The government will ask the Court of Auditors to "suspend the authorisation approval" which would have greenlit the privatisation, it said in a statement carried by the Portuguese news agency Lusa.
The previous right-wing government decided in September to hand the management of Lisbon's public transport over to the Spanish group Avanza, while the northern city of Porto would see its system managed by the Spanish Alsa and French Transdev.
But in November a leftist alliance led by the Socialist Party toppled the right-wing coalition and forced Prime Minister Pedro Passos Coelho to resign.
The coalition had won the most votes in an October election but lost the absolute majority it had enjoyed since 2011, leading to weeks of political limbo.
The Socialist Party and the hard left agree that the privatisation of public transport in Portugal's two biggest cities should be blocked, but disagree over how it should be done.
A parliamentary vote on the issue has been postponed pending further negotiations between the parties in the leftist bloc.