Extending possession date of section 21 notice issued

Possession - Section 8 and Section 21

I issued my tenant a section 21 notice on the 21/11/2012 (A few days before the AST of 12 mths was up for renewal)The section 21 notice gave me a possession date of the 21/1/2013. The tenant is in receipt of housing benefit and the LHA have been unable to re house the tenant and have asked me directly for an extension to the date of 21/01/2013 . If I grant this what impact does this have on my ability to enforce the section 21 notice already issued. Should we start court proceedings anyway, is there a cost to myself for this and would the court allow possession even if we have agreed an extension for the tenant to remain in the property.

Thank you

Paulene