The Scottish Government is expected to abandon its legal action over the UK Government's veto of Holyrood's gender reform legislation.

Ministers have until December 29 to appeal the Court of Session’s ruling that Scottish Secretary Alister Jack's use of Section 35 of the Scotland Act had been lawful. 

However, the Scottish Government is set to update MSPs tomorrow, before Holyrood breaks for the Christmas recess. 

READ MORE: Humza Yousaf loses landmark court case on Holyrood gender reforms

It is understood ministers believe there would be merit in an appeal to define the operation of the Section 35 power for the future.

However, Lady Haldane’s judgment against the Scottish Government earlier this month was so emphatic that the prospect of a successful appeal is too remote to continue this particular case.

MSPs passed the Gender Recognition Reform Bill (GRR) in December last year by 86 votes to 39 on a cross-party basis.

The legislation was supposed to speed up and simplify the process for a trans person to obtain a gender recognition certificate and change their legal sex.

Under the current system, this takes at least two years, involves a medical diagnosis and is only available at 18.

Holyrood’s Bill would have cut the waiting time to six months, scrapped the need for medical diagnosis and lowered the age threshold to 16.

However, before it could become law, Scottish Secretary Alister Jack blocked it by using the first-ever order under Section 35 of the 1998 Scotland Act.

He argued that although the subject matter was within Holyrood’s powers, the Bill would have an adverse effect on the operation of UK-wide equality law.

Running for the SNP leadership in the spring, Humza Yousaf said he would challenge the veto as a matter of principle if he won and later launched a judicial review.

His top law officer, the Lord Advocate Dorothy Bain KC, argued at the Court of Session in September that Mr Jack’s decision had been unlawful, irrational and motivated by a “policy disagreement” with Edinburgh rather than legal concerns.

In her ruling, delivered earlier this month, Lady Haldane rejected the Scottish Government’s arguments and said there was nothing to lead her to conclude that Mr Jack had acted unreasonably or unlawfully.

She also said Section 35 was an “intrinsic part” of devolution, not a perversion of it.

Mr Yousaf disagreed, calling it a “dark day for devolution.”

"The Court has confirmed that legislation passed by a majority in Holyrood can be struck down by Westminster. The only way to guarantee we get true self-government is through independence," he tweeted.

READ MORE: Gender reform Scotland: Young trans people 'heartbroken'

Earlier this month, Mr Jack said he was "minded to seek cost from the Scottish Government" for the UK Government's legal bills.

He told the Commons' Scottish Affairs Committee: "My understanding, and I don't have the precise figures, is that the Scottish government has spent £230,000. We have spent circa £150,000 on our legal advice.

"If this was to go to the Inner Court of Session, you could easily double that up. And if it was to then go to the Supreme Court, you could double that again. So it's a sort of exponential increase.

"You could easily end up at the thick end of £2 million." 

He defended his use of the Section 35 order, telling the committee that it was the first in the history of devolution where UK Government law officers had judged Scottish Parliament legislation would have "adverse" effects on reserved legislation.