diff --git a/neutronclient/tests/functional/hooks/gate_hook.sh b/neutronclient/tests/functional/hooks/gate_hook.sh
index e34a6c802..36db5690f 100755
--- a/neutronclient/tests/functional/hooks/gate_hook.sh
+++ b/neutronclient/tests/functional/hooks/gate_hook.sh
@@ -8,20 +8,34 @@ GATE_DEST=$BASE/new
 NEUTRONCLIENT_PATH=$GATE_DEST/python-neutronclient
 GATE_HOOKS=$NEUTRONCLIENT_PATH/neutronclient/tests/functional/hooks
 DEVSTACK_PATH=$GATE_DEST/devstack
+LOCAL_CONF=$DEVSTACK_PATH/late-local.conf
+DSCONF=/tmp/devstack-tools/bin/dsconf
+
+# Install devstack-tools used to produce local.conf; we can't rely on
+# test-requirements.txt because the gate hook is triggered before neutronclient
+# is installed
+sudo -H pip install virtualenv
+virtualenv /tmp/devstack-tools
+/tmp/devstack-tools/bin/pip install -U devstack-tools==0.4.0
 
 # Inject config from hook into localrc
 function load_rc_hook {
     local hook="$1"
+    local tmpfile
+    local config
+    tmpfile=$(tempfile)
     config=$(cat $GATE_HOOKS/$hook)
-    export DEVSTACK_LOCAL_CONFIG+="
-# generated from hook '$hook'
-${config}
-"
+    echo "[[local|localrc]]" > $tmpfile
+    $DSCONF setlc_raw $tmpfile "$config"
+    $DSCONF merge_lc $LOCAL_CONF $tmpfile
+    rm -f $tmpfile
 }
 
+
 if [ "$VENV" == "functional-adv-svcs" ]
 then
     load_rc_hook fwaas
 fi
 
+export DEVSTACK_LOCALCONF=$(cat $LOCAL_CONF)
 $BASE/new/devstack-gate/devstack-vm-gate.sh