A Darlington bus company has been driven into voluntary liquidation after being unable to compete against larger competitors.

The Green Bus venture ended at the weekend after it lost out to Arriva in contract negotiations to provide an out-of-town service to areas including Newton Aycliffe, Bishopton and Stillington.

Owner Richard Cranmer, who set up the company on November 2003 with 13 buses, decided to put it into voluntary liquidation because it was left running only five buses a day.

"When we lost the contract last week, I had to make a strategic decision," he told the D&S Times. "The five buses covered their own costs but were not viable enough to cover the overall costs over a reasonable period.

"As soon as I realised I couldn't pay the drivers, I had to pull the plug.

"We had a good operation here and I feel guilty that 40 members of loyal staff, who have given me nothing but 100 per cent, have lost their jobs.

"Every single one of them has been understanding. I feel for all of them."

Mr Cranmer said the company had struggled to compete against the town's two larger bus companies, Arriva and Stagecoach, and that he had been working with Darlington Borough Council to improve the situation.

"I moved to Darlington when I was 30 and I was a manager at Stagecoach before I set up the business," he said. "I love the place and wanted to set up a company that was a bit different.

"The council was very committed to us and helped us get off the ground."

He added: "It is just a shame we appeared to be winning the support of the passengers but were unable to compete against the big companies."

Mr Cranmer spoke to four bus companies in an attempt to preserve some of the services and jobs but this option was found to be unfeasible.

However, the borough council announced all the former Green Bus services would be running again by yesterday via Stagecoach, Arriva and JSB Travel.