fare increases by bus operator First Midland Red have been condemned by Malvern Hills district councillors, who say it could lead to a further increase in Council Tax.

The cost of introducing a half fares scheme for pensioners in the district has still not been worked out.

This must be introduced by the summer to meet new Government legislation, Malvern being one of the few authorities in the country not already operating such a scheme.

The council has provisionally costed it at £250,000, which will give half-price travel within the confines of the Malvern Hills district.

But it may have to revise that estimate by as much as £25,000 in light of a 5p increase in fares introduced this week by First Midland Red.

At last week's executive board meeting, Conservative finance spokesman Paul Cumming said the authority should fight the increase with whatever means it had and that the company should be asked to come to the March 6 council meeting and explain itself.

Liberal Democrat group leader Tom Wells also expressed his concern over the fares increase.

First Midland Red spokesman Austin Birks said there were genuine reasons for the increase, including the knock-on effects of the price of fuel and increases in insurance.

He added that a biggest factor was the pressure on recruiting and retaining staff in a time of low unemployment.

Mr Birks said the company - the main bus operator in Worcestershire - had not been approached to attend the district council meeting although it was meeting with representatives from Worcestershire County Council this week, when the issue may be among those raised.

A county council spokesman said the authority was also "very disappointed" at the rise and had written to the company for an explanation.

The effects of the concessionary bus fares scheme on the Council Tax is still unknown. the district council's projected 26.6 per cent increase would rise slightly if it was forced to budget an extra £25,000.

The full council meeting on Tuesday (March 6) will also have to decide how much to subsidise improved schemes, which would offer greater benefit for people in outlying districts or border areas.

Joint working with neighbouring councils could see cheap travel passes being offered to cover the full county and beyond. Fees of between £5 and £20 are being suggested for these passes but the level of subsidy could impact considerably on the Council Tax.