The private security firm in charge of the youth jail at the centre of abuse claims could only be running the centre for four more months.

The Ministry of Justice announced today that G4S will not be taking on the new contract for Medway Secure Training Centre which it was awarded in September.

The transfer to the new contract was set to take place today but it has been postponed, with the old contract extended until July.

A statement posted on the department’s website said: “The Secretary of State considers the appropriate course of action is to extend the current contract with G4S for a short period, rather than allowing transition to its new contract under which services would otherwise have commenced on April 1, 2016.”

Justice minister Michael Gove’s decision will enable the department to “properly consider all options for the future delivery of services” following a report from the independent improvement board.

The board, headed up by Joseph Williamson Mathematics School head, Gary Holden, was set up in January to oversee improvements at the Rochester centre.

A final report from the board was due at the end of March and will detail their confidence in G4S to meet safeguarding standards at Medway.

Footage secretly filmed for BBC’s Panorama by an undercover journalist showed staff appearing to use excessive force to restrain youngsters, children being bullied by staff, officers lying when reporting incidents and staff boasting about hurting inmates.

G4S Regional President Peter Neden, said: “We have agreed with the MoJ that the transfer to the new contract at Medway STC, scheduled to take effect today, will be postponed while the work of the ministry’s improvement board is completed. The existing agreement will be extended in its current form for a period of up to four months.”

The centre stopped accepting new admissions while an investigation was carried out into the claims of bullying and abuse, but last month, the Youth Justice Board decided young offenders will once again be placed at the training centre but on a case-by-case basis.

Mr Neden added: “Since the issues were identified at Medway earlier this year, we have been working hard to review every aspect of our recruitment, training, reporting and governance processes and it is encouraging that the YJB have started to place young people at the centre once again.

“While we recently announced our intention to exit children’s services, including at Medway, we remain committed to the welfare of young people at the centre and responding to the serious issues raised at the beginning of the year.”

G4S has the been running Medway STC since it opened in 1998 but announced in February that it is selling its children’s services business which includes its contracts to manage Medway STC and Oakhill in Milton Keynes.

After the BBC Panorama programme, three men from Medway, aged 25, 34 and 35, were arrested on suspicion of child neglect. A Medway man, 28, was arrested on suspicion of assault, and a 25-year-old East Sussex man was arrested on suspicion of child neglect. They have been bailed until April.