diff --git a/cmdparse.c b/cmdparse.c
index a24324f..37d1581 100644
--- a/cmdparse.c
+++ b/cmdparse.c
@@ -224,12 +224,13 @@ CPS_ParseNTPSourceAdd(char *line, CPS_NTP_Source *src)
 /* ================================================== */
 
 int
-CPS_ParseLocal(char *line, int *stratum)
+CPS_ParseLocal(char *line, int *stratum, double *distance)
 {
   int n;
   char *cmd;
 
   *stratum = 10;
+  *distance = 1.0;
 
   while (*line) {
     cmd = line;
@@ -238,6 +239,9 @@ CPS_ParseLocal(char *line, int *stratum)
     if (!strcasecmp(cmd, "stratum")) {
       if (sscanf(line, "%d%n", stratum, &n) != 1)
         return 0;
+    } else if (!strcasecmp(cmd, "distance")) {
+      if (sscanf(line, "%lf%n", distance, &n) != 1)
+        return 0;
     } else {
       return 0;
     }
diff --git a/cmdparse.h b/cmdparse.h
index eb1714d..6944475 100644
--- a/cmdparse.h
+++ b/cmdparse.h
@@ -60,7 +60,7 @@ typedef struct {
 extern CPS_Status CPS_ParseNTPSourceAdd(char *line, CPS_NTP_Source *src);
   
 /* Parse a command to enable local reference */
-extern int CPS_ParseLocal(char *line, int *stratum);
+extern int CPS_ParseLocal(char *line, int *stratum, double *distance);
 
 /* Get a string describing error status */
 extern void CPS_StatusToString(CPS_Status status, char *dest, int len);
diff --git a/conf.c b/conf.c
index d989a5e..8c125ff 100644
--- a/conf.c
+++ b/conf.c
@@ -108,6 +108,7 @@ static char *dumpdir;
 
 static int enable_local=0;
 static int local_stratum;
+static double local_distance;
 
 /* Threshold (in seconds) - if absolute value of initial error is less
    than this, slew instead of stepping */
@@ -817,7 +818,7 @@ parse_log(char *line)
 static void
 parse_local(char *line)
 {
-  if (!CPS_ParseLocal(line, &local_stratum))
+  if (!CPS_ParseLocal(line, &local_stratum, &local_distance))
     command_parse_error();
   enable_local = 1;
 }
@@ -1565,10 +1566,11 @@ CNF_GetCommandPort(void) {
 /* ================================================== */
 
 int
-CNF_AllowLocalReference(int *stratum)
+CNF_AllowLocalReference(int *stratum, double *distance)
 {
   if (enable_local) {
     *stratum = local_stratum;
+    *distance = local_distance;
     return 1;
   } else {
     return 0;
diff --git a/conf.h b/conf.h
index 34c7e41..6ded8f5 100644
--- a/conf.h
+++ b/conf.h
@@ -92,7 +92,7 @@ extern double CNF_GetReselectDistance(void);
 extern double CNF_GetStratumWeight(void);
 extern double CNF_GetCombineLimit(void);
 
-extern int CNF_AllowLocalReference(int *stratum);
+extern int CNF_AllowLocalReference(int *stratum, double *distance);
 
 extern void CNF_SetupAccessRestrictions(void);
 
diff --git a/reference.c b/reference.c
index f9b4ad4..2b51f01 100644
--- a/reference.c
+++ b/reference.c
@@ -45,6 +45,7 @@
 static int are_we_synchronised;
 static int enable_local_stratum;
 static int local_stratum;
+static double local_distance;
 static NTP_Leap our_leap_status;
 static int our_leap_sec;
 static int our_stratum;
@@ -112,6 +113,11 @@ static char *leap_tzname;
 static time_t last_tz_leap_check;
 static NTP_Leap tz_leap;
 
+#define MAX_LOCAL_TIMEOUT (30 * 24 * 3600.0)
+
+/* Timer for local reference */
+static SCH_TimeoutID local_timeout_id;
+
 /* ================================================== */
 
 static LOG_FileID logfileid;
@@ -230,7 +236,8 @@ REF_Initialise(void)
 
   correction_time_ratio = CNF_GetCorrectionTimeRatio();
 
-  enable_local_stratum = CNF_AllowLocalReference(&local_stratum);
+  enable_local_stratum = CNF_AllowLocalReference(&local_stratum, &local_distance);
+  local_timeout_id = 0;
 
   leap_timeout_id = 0;
   leap_in_progress = 0;
@@ -801,6 +808,38 @@ update_leap_status(NTP_Leap leap, time_t now, int reset)
 
 /* ================================================== */
 
+static void
+local_timeout(void *arg)
+{
+  local_timeout_id = 0;
+  REF_SetUnsynchronised();
+}
+
+/* ================================================== */
+
+static void
+update_local_timeout(void)
+{
+  double delay;
+
+  SCH_RemoveTimeout(local_timeout_id);
+  local_timeout_id = 0;
+
+  if (!enable_local_stratum || !are_we_synchronised)
+    return;
+
+  /* Add a timer that will activate the local reference approximately at the
+     point when our root distance reaches the configured root distance */
+  delay = (local_distance - (our_root_delay / 2.0 + our_root_dispersion)) /
+          (our_skew + fabs(our_residual_freq) + LCL_GetMaxClockError());
+  delay = CLAMP(0.0, delay, MAX_LOCAL_TIMEOUT);
+  local_timeout_id = SCH_AddTimeoutByDelay(delay, local_timeout, NULL);
+
+  DEBUG_LOG(LOGF_Reference, "Local reference timeout %f", delay);
+}
+
+/* ================================================== */
+
 static void
 write_log(struct timeval *ref_time, char *ref, int stratum, NTP_Leap leap,
     double freq, double skew, double offset, int combined_sources,
@@ -1063,6 +1102,9 @@ REF_SetReference(int stratum,
     }
   }
 
+  /* Update timer that activates the local reference */
+  update_local_timeout();
+
   /* Update fallback drifts */
   if (fb_drifts) {
     update_fb_drifts(abs_freq_ppm, update_interval);
@@ -1127,6 +1169,7 @@ REF_SetUnsynchronised(void)
 
   update_leap_status(LEAP_Unsynchronised, 0, 0);
   are_we_synchronised = 0;
+  update_local_timeout();
 
   LCL_SetSyncStatus(0, 0.0, 0.0);