A U.S. judge has ordered further negotiations between the U.S. government and Megaupload over the retention of data hosted by the embattled file-sharing service.

According to v3.co.uk, judge Liam O'Grady has asked lawyers from both sides to engage in mediation sessions in order to resolve the matter of archiving or deleting the information which had been stored by Megaupload users.

The ruling temporarily preserves the data which has been managed by service provider Carpathia Hosting since Megaupload was dismantled by US authorities in January. Since the shutdown, Carpathia claims it has had to spend as much as $9,000 per day to maintain the data.

The company was shut down by the FBI earlier this year over numerous charges of copyright infringement. Megaupload founder Kim Dotcom and a number of the company's executives are facing extradition to the U.S. for trial.

The takedown has sent shockwaves through the file-sharing and online backup sectors. Following the bust, a number of firms modified or suspended their own file sharing operations fearing legal action.

Dotcom's case was given a significant boost last month when a judge voided the restraining order barring the Megaupload founder from accessing the $200m fortune he amassed from running the site.