Got a reply from the horses mouth!
Wrote to Nicol Stephen got a reply from Iain Cameron of the Scottish Executive Aviation Policy Branch (who them?)
I quote
"the minister is supportive of Argyll & Bute Council's proposals to commence scheduled air services from Oban Airport. The issue of how the airport is operated is a matter for the Council, as the owner of the airport, and the Minister has no locus to intervene. No decision has been made to transfer Oban Airport to HIAL. The minister would expect that any decision on the future operation of the airport would be properly considered taking into account / cognisance of any appropriate procurement procedures"
Basically it is for the Council to decide.........