BUS passengers are being warned they face more service cuts over the next three months due to a funding shortfall.
Operators have been told that public money available to reimburse them for carrying passengers through the Scottish Government's free travel plan, could be as much as £15million below the costs of running the flagship scheme by the end of this financial year.
It is expected to put a further squeeze on their ability to run less lucrative services in the evenings and at weekends and could see some smaller operators put out of business.
"There are several bus companies that are already teetering. This could push them over the edge," one industry source said.
"If we get another really bad bout of snow and ice, fewer people will go by bus and that will help but we've been told that we could be as much as £15m out."
It comes as a review of the Concessionary Travel Scheme, which offers free bus travel to those over 60, disabled passengers and veterans, looks set to recommend a cut of up to 13% in the rate at which bus firms are reimbursed. Steeper cuts of up to 22% appear to have been ruled out.
Despite a succession of official reviews finding that free bus travel was unsustainable and, according to Audit Scotland, could cost more than £500m by 2023 as Scotland's elderly population increases, ministers fought off suggestions that access to it should be restricted.
Funding was cut from £192m a year to £185m in 2011 but then restored to its 2010 level and subjected to a three-year freeze from 2011 to 2014. The cap meant that bus firms had to repay between £7m and £9m to the Scottish Government last year under a claw-back mechanism that comes in when costs exceed the available funding.
Figures from the Department for Transport show that bus fares in Scotland went up 5% in 2012 while the total miles travelled by registered bus services fell by 4%.
Last year's cuts appear to have been concentrated on subsidised routes, which are unprofitable but considered "socially necessary".
Discussions with the bus industry to agree an "appropriate" reimbursement rate for the 2013/14 financial year were continuing, a spokeswoman for Transport Scotland said.