BUS operators and passenger groups last night broadly welcomed Government plans which will see councils take back control of services and fares.

Proposed changes will allow councils to take control of bus services by awarding a contract to a single firm while having greater say over bus frequencies, timetables and fares.

Transport Secretary Douglas Alexander said that since deregulation 20 years ago, which allowed private firms to decide which services to run, "some areas had seen a free-for-all with the needs of passengers being neglected".

Last night, Arriva said it was committed to working with the Department for Transport along with other stakeholders in the sector on the proposals.

Its off-shoot, Arriva North-East, runs 200 bus services - equating to about 50 million passenger journeys every year - and employs 600 staff.

Chief executive David Martin said: "We look forward to playing a constructive role in discussing and refining the all-important detail in the run-up to next year's draft Road Transport Bill.

"Common sense and experience suggest that voluntary agreements can be reached which will benefit the travelling public and help operators co-operate in helping local authorities meet their legitimate public policy objectives."

Councillor Dave Wood, chairman of the Tyne and Wear Passenger Transport Authority (PTA), which is backing more regulatory control over bus services, said: "What all passengers want is a convenient, reliable local bus service.

"These proposals show ministers recognise this and are prepared to give the PTA and Nexus (transport executive for Tyne and Wear) the additional powers necessary."

However, Richard Cranmer, a former managing director of the Green Bus company, which ceased service in Darlington last year, issued a cautionary note and said he believed the plans would not benefit smaller operators.

Mr Cranmer, a former divisional traffic manager with Stagecoach, said: "You will probably find one larger operator will take greater control of a whole network because of this.

"Whether the council would give greater preference to a smaller operator running a service than a bigger one - I don't think they will.

"They will go for the cheapest cost option."

Councillor Nick Wallis, cabinet member for highways and transport at Darlington Borough Council, said: "The message from local communities is that the deregulated system simply isn't working.

"Too many communities are being failed by the bus companies disinvesting, leaving councils to pick up the pieces.

"Thirteen years ago, unfettered competition cost this town its municipal bus company.

"I'm pleased that a Labour Government is now helping to right that wrong by addressing the power imbalance between big bus companies and local people.