A polarization multiplexed optical system, comprising: a transmitter configured to transmit a polarization multiplexed signal and to insert a pilot tone as a state of polarization reference for the polarization multiplexed signal; and a receiver communicatively coupled to the transmitter and configured to extract the pilot tone and correspondingly polarization demultiplex the polarization multiplexed signal based on the extracted pilot tone, characterised in that the receiver is configured to mix the polarization multiplexed signal with a local oscillator using a hybrid to generate a radio frequency signal, extract X and Y components of each of a vertically polarized and horizontally polarized pilot tone, with the X and Y components being polarization axes of a polarization beam splitter at the receiver, and process the X and Y components, each being low speed signals, with a low speed interpolator digital signal processing block, wherein the X and Y components are extracted by mixing the radio frequency signal from the hybrid with a radio frequency local oscillator; for each of the pilot tones, the frequency of the radio frequency local oscillator is chosen such that the mixing product converts the radio frequency signal to baseband; and applying low pass filtering such that the contents of the vertically polarized and horizontally polarized pilot tones are separately extracted. a transmitter configured to transmit a polarization multiplexed signal and to insert a pilot tone as a state of polarization reference for the polarization multiplexed signal; and a receiver communicatively coupled to the transmitter and configured to extract the pilot tone and correspondingly polarization demultiplex the polarization multiplexed signal based on the extracted pilot tone, characterised in that the receiver is configured to mix the polarization multiplexed signal with a local oscillator using a hybrid to generate a radio frequency signal, extract X and Y components of each of a vertically polarized and horizontally polarized pilot tone, with the X and Y components being polarization axes of a polarization beam splitter at the receiver, and process the X and Y components, each being low speed signals, with a low speed interpolator digital signal processing block, wherein the X and Y components are extracted by mixing the radio frequency signal from the hybrid with a radio frequency local oscillator; for each of the pilot tones, the frequency of the radio frequency local oscillator is chosen such that the mixing product converts the radio frequency signal to baseband; and applying low pass filtering such that the contents of the vertically polarized and horizontally polarized pilot tones are separately extracted. mix the polarization multiplexed signal with a local oscillator using a hybrid to generate a radio frequency signal, extract X and Y components of each of a vertically polarized and horizontally polarized pilot tone, with the X and Y components being polarization axes of a polarization beam splitter at the receiver, and process the X and Y components, each being low speed signals, with a low speed interpolator digital signal processing block, wherein the X and Y components are extracted by mixing the radio frequency signal from the hybrid with a radio frequency local oscillator; for each of the pilot tones, the frequency of the radio frequency local oscillator is chosen such that the mixing product converts the radio frequency signal to baseband; and applying low pass filtering such that the contents of the vertically polarized and horizontally polarized pilot tones are separately extracted.