The company, owned by Reading Borough Council, has refused to raise fares in Reading, but has already slapped an extra 10p on a journey in Newbury and Thatcham, and an extra 20p each way in rural areas.

But after a meeting in Reading earlier this month, Reading Transport said it was in talks with West Berkshire Council about reducing under-used buses in rural areas.

Newbury Buses has faced an extra £300 a week to fill up each bus from a year ago, and with the Government planning an extra 2p a litre fuel tax in October, the company warned that fares may rise again.

The current situation was exacerbated during the recent sewer works in Cheap Street, which resulted in buses moving to the Market Place for three months. Newbury Buses said passenger numbers had dropped while the diversion used extra fuel.

Some Reading buses - and one in Thatcham - have switched to using sugar-beet biofuel, after Reading Borough Council stumped up £180,000 for a new 'green' pump at the main depot.

There are 37 bus routes in West Berkshire, of which only 4 do not require a council subsidy, which is now worth around £1m a year. Although 2m local journeys are made by bus each year, the number is declining, compared to 4m local train journeys, which is rising sharply.