After nearly three weeks of turmoil and back-and-forth accusations, Vineyard school leaders officially severed ties with their school bus contractor, Island Transport, and have crafted a deal to hire the Vineyard Transit Authority (VTA) and a Florida company to run the school buses in time for the opening of the school year next month.

In a deal negotiated four days ago, the Vineyard schools - all but Edgartown, which operates its own transportation system - agreed to hire the VTA to maintain its fleet of 22 school buses and contract with a Florida business to hire and manage bus drivers.

"It's a creative solution to a difficult situation," Peg Regan, principal of the Martha's Vineyard Regional High School, told the Gazette yesterday.

The deal comes just weeks after Island Transport president James Dario wrote a letter to school committee members, announcing his company was exiting its contract and blaming school leaders for breaching the terms.

Island Transport vice president Scott Dario later said he wanted more autonomy to discipline drivers and the authority to determine snow days, and he charged school leadership with practices that created safety concerns.

Mrs. Regan explained yesterday that school leaders - faced with the threatening letter - quickly began planning another way to fill the potential transportation gap.

More than 1,500 public school students rely on the buses for a ride to and from school.

"We found we could do a second arrangement, and it would probably work out. The negotiations were far along," Mrs. Regan said.

All-Island school committee members met twice in the last two weeks and instructed their attorney to pressure Island Transport to meet the terms of the contract, which was headed into the last year of a five-year arrangement.

The Oak Bluffs company has run the Vineyard school buses for more than 20 years.

Just over a week ago, Scott Dario told the Gazette his company wanted to honor the contract and roll the buses as agreed.

But the turnaround from Island Transport came too late for school leaders.

Vineyard schools superintendent Dr. Kriner Cash was skeptical.

"I doubt very seriously that the school committee would be interested in any such 180-degree turnabout. How can you trust it?" he told the Gazette.

By that time, Mr. Cash had already begun talks with the VTA, whose governing board had voted to help the schools with its apparent transportation problems.

Now, the schools are prepared to enter a 90-day agreement with the VTA for bus maintenance and safety checks while hiring a Winter Springs, Fla. company that already works with the VTA to handle the labor force.

Owned by businessman Edward W. Pigman, the Florida-based company currently hires and manages drivers for the VTA and will likely do the same thing for the Vineyard school bus operation. The schools will pay to insure the buses.

Terms of the agreement are still being finalized, but Amy Tierney, head of business affairs for the schools, said the spending for the two contracts will fall within the budget.

During the next three months, the schools will have to advertise for proposals to operate the bus service on a longer-term basis.

"Our main concern was to forge this partnership within the operating budget we have now and not have to go back to the towns for more money," said Mrs. Regan.

The Vineyard schools own the buses and have traditionally leased them to Island Transport. The deal for the last four years set a fee of $365,000 a year paid to the schools, which then contracted Island Transport for just over $1 million a year to operate the bus system and cover the payroll for drivers.

They shared the cost of insurance, fuel and maintenance. By the time state funding came in from the department of education, the Vineyard schools were expecting to spend $575,000 for transporting students.

Relations with Island Transport had already been strained.

Last year, Island Transport threatened to strand students at the end of a school day in June unless the schools agreed to pay the company roughly $100,000 in unpaid bills that school bookkeepers had questioned.

This summer, the Darios accused school administrators of destroying the relationship. Mr. Cash called the bus company's actions "unprofessional and irresponsible."

It was unclear why the Darios initiated the move to leave the contract, saying they wouldn't run the service without "fundamental changes" in the terms, and then later agreed to operate the buses without any modifications.

Scott Dario had called for an overhaul of the terms, recommending Island Transport manage the operation for a fee of $75,000 a year.

School officials yesterday could not say how many drivers will need to be hired under the new arrangement and how many drivers who worked for Island Transport will come to work with the VTA and Mr. Pigman's company.