BUS routes are under threat after a small operator announced it was closing due to insurance costs trebling.

Leven Valley Coaches said its insurance premiums had risen from £54,000 to £154,000 a year due to the compensation culture - and said one minor accident involving one of its buses last year led to claims of over £100,000.

The company, owned by Compass Royston Coaches in Stockton, operates 11 services across Middlesbrough, Stockton, Billingham and Redcar. It has been going for almost three decades but will cease trading on March 20, when its current year's insurance runs out.

Compass Royston will continue trading as it is a completely separate business.

Leven Valley blamed tough economic conditions, lower-than-anticipated passenger numbers and the end of the last remaining public subsidies, as well as the rise in insurance costs.

It runs services 18 and 19, the Middlesbrough circular; 45 Middlesbrough to Wolviston Court, Billingham; 455 and 456 Bankfields to Nunthorpe; 84 Stockton to Stillington; 492 Middlesbrough to Normanby Flatts Lane; H66 Hartburn to Teesside Park, and early morning Middlesbrough buses 605, 606 and 607. Connect Tees Valley is said to be looking at these services to see if other operators will take them over.

It is hoped some of LevenValley's 22 drivers will transfer to Compass Royston and the company is hoping to avoid any compulsory redundancies.

Managing director Andrew Carter said: "We are all absolutely gutted but we just couldn't carry on. We live in a culture of blame and we have been hit by a number of claims in the last year which means our insurance premium has gone up massively. We are a big risk if we are a little company."

He said there had been a rise in the numbers of passengers making claims through free personal injury phoneline companies.

Connect Tees Valley, which co-ordinates bus services on behalf of the five local authorities, said it was trying to find replacement operators for the lost services before March 20.

Stephen Little, a partner in Hartlepool-based small bus firm Paul's Travel, which runs one bus service as well as coach hire, said that personal injury firms would often contact other passengers involved in an accident to encourage them to make claims too.

But he said the lower cost of diesel had offset rises in insurance premiums in his case.

Alex Cunningham, Labour MP for Stockton North, said: "

Reacting to the news that Leven Valley Bus Services will cease to operate from Friday, 20 March 2015, Alex Cunningham, Labour MP for Stockton North, said rural communities around his constituency would lose out most but said Stockton Council was speaking to other bus operators to fill the gaps in services.