Dominance of top bus firms revealed

The big five – First, Go Ahead, Arriva, Stagecoach and National Express – generated 72 per cent of total revenues among bus companies in England in 2008, the report said.

The five firms also had a far greater operating profit margin than other bus companies, the report prepared for the Department for Transport by LEK Consulting said.

In addition, the five had higher operating profit margins from buses than from other sectors in which they were involved.

The report also said there were "a number of barriers that prevent new operators from entering into the market".

The Competition Commission has already launched an investigation into bus services.

Transport Minister Norman Baker said: "I'm committed to getting the best deal for bus passengers, especially since two thirds of public transport journeys are made by bus.

"I am not afraid of looking hard at all options to ensure that public spending secures good value for money. We need a fair deal for the passenger and the taxpayer.

"This research is an interesting and challenging contribution to the debate."