Britney Spears and Kevin Federline's custody dispute looks set to head to trial in August after the couple failed to reach agreement in mediation.

Federline's lawyer Mark Vincent Kaplan told the E! Online website that although day-long talks between lawyers for the two sides were positive, no settlement was reached and a trial was likely on 25 August.

"The mediation didn't result in an agreement that would avoid the trial... The mood was comfortable, positive and it was a mood that was consistent with opening at least a great dialogue, which is necessary," Kaplan said.

Kaplan said Federline (30) wants to retain sole legal and physical custody of the couple's two young children, Sean Preston and Jayden James, while allowing Spears (26) visitation rights.

"Kevin is seeking to maintain the sole legal and physical custody that he presently has," Kaplan said. "Kevin has had sole legal custody since January. He wants that to become the permanent order at trial, and the visitation to be consistent with what the court expanded it to this week."

A court this week granted Spears overnight visitation with the children in addition to two day visits per week.

Spears' visitation rights were severely restricted earlier this year amid spiraling personal problems and fears for the singer's mental health.

However, the pop star has appeared to have been getting her life back on track in recent months, after she was twice rushed to hospital earlier this year for treatment in a psychiatric unit.

Spears, one of the most successful pop stars of her generation, has been locked in the custody saga with Federline since the couple split in 2006.

Her access to her children was restricted last October after she failed to submit to random drug testing as demanded at an earlier hearing where the court ruled she was a "habitual and continuous drug user".

Spears shot to superstardom in late 1998 with her smash-hit debut album 'Baby One More Time', which she followed with another chart-topping success the following year, 'Oops!... I Did It Again'.

AFP