On Prem Lync - Enable federation for "Lync Online" causes presence fail and gives error when creating groups

Hi all,
We have had Lync on premise for a long time, and have recently added Office 365 Business Premium Plan because we wanted Cloud exchange and SharePoint.
I have found that on our on prem Lync, when we enable federation for "Lync Online" it cause our presence to intermittently flick on and off, and we are unable to create groups in our Lync Client. We get the message "unable to create a group
at this time".
We are also not able to federate with Office365 hosted Lync Online clients.
This seems to be a bug between Office365 plans that have hosted lync licenses and on prem Lync. Has anyone found the
What I need to do is disable office365 Lync, and I have tried to do that in every location I can find (DNS/User settings), but I still have this issue.
Has anyone come across this issue and found a fix?
Simon.

Hi,
Did you do a Lync Hybrid environment or just make federation with Lync Online?
Please double check if there is any wrong configuration for federation with Lync online environment. You can refer to the following steps in the link below of “Configure federation support for a Lync Online domain in Lync Server 2013”:
http://technet.microsoft.com/en-us/library/hh202166.aspx
Then make sure CMS replication update to the latest status.
If the issue persists, check if Lync Server update the latest version. If not, update it and then test again.
Best Regards,
Eason Huang
Eason Huang
TechNet Community Support

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