The Fiji Court of Appeal has dismissed the Qarase government's appeal against a High Court ruling that the Labour Party is constitutionally entitled to be part of the cabinet.
But Radio Fiji reports the Appeal court has granted the government leave to appeal the matter further in the Supreme Court.
Government lawyers say they will file their appeal papers next week.
The government is still disputing the Appeal Court's February interpretation of the constitutional provisions on the composition of cabinet.
High court judge, Justice Anthony Gates, who followed the appeal court interpretation, had ordered that the Labour Party be given cabinet seats in proportion to their numbers in Parliament.
Justice Gates had ruled that apart from the SDL, Labour was the only party with the necessary 10 percent threshold needed to enter cabinet.
The government's appeal is likely to be heard by the Supreme Court in its June session.