West Yorkshire Mayor Tracy Brabin and South Yorkshire Mayor Oliver Coppard claim private operators are responsible for a “managed decline”, as they have driven millions of passengers away by cutting services which do not generate large profits.

The Labour mayors are drawing up plans that would see the taxpayer-funded organisations which they run take charge of buses – in a process known as franchising – and make decisions about routes, services and fares.

They are looking to follow in the footsteps of London and Greater Manchester, where publicly-run buses on the new Bee Network will begin running in the likes of Bury, Bolton and Wigan later this month.

Mr Holden said the Government has accepted the old model, which was introduced by Margret Thatcher in 1986 and allows private operators to run bus networks independently, does not work.

But he also said the Government is “agnostic” about whether local leaders should bring buses back under public control or form “enhanced partnerships” with private operators to cap fares, prioritise routes and improve services.

“In Cornwall they've seen that work really well and they've now got bus usage well over 100 per cent of pre-pandemic levels,” said Mr Holden.

“Other places want to go down the franchising route and that's fine, but franchising is not a panacea.

The Tory Minister said there is “no evidence” to suggest franchising automatically delivers affordable and reliable services.

“You also transfer all of that farebox risk from the private sector onto a taxpayer,” he added. “So you've got to be really careful before you do that. It's a big financial burden.

“It's horses for courses and it’s up to these mayors who are democratically accountable for the decisions they take.”

Local leaders in West and South Yorkshire are already in enhanced partnerships with private operators.

But Ms Brabin is looking to bring buses under public control with a franchising agreement from 2027 and Mr Coppard said his franchising plans are currently being assessed.

Mr Holden spoke during a visit to Scarborough, where he announced £129m of funding that can be spent on rolling out low-emission buses – powered by electricity and hydrogen – across the country.

He said the Government has provided £2bn of support to operators during the pandemic, to help them protect services.

It also recently announced £500m that will be used to protect routes until 2025 and cap single fares at £2, for passengers travelling with more than 130 operators outside London, until the end of October 2024.

It comes as operators across the country claim they have been forced to cut services in recent months, despite the government support, because they have been struggling with rising costs and low passengers numbers.

Last year, the Government announced £1.1bn will be provided to support 31 bus service improvement plans, which promise to make services more affordable, more reliable and greener.

West Yorkshire received £70m and City of York Council got £17.4m, but bids submitted by North Yorkshire (£116m) and South Yorkshire (£430m) were rejected outright.

The Department for Transport said it approved bids in areas which have ambitious plans to “repeat the success” seen in London, where there has been a dramatic increase in bus usage since the late 1990s, but bids which failed to show “sufficient ambition” were dismissed.

Bus Minister says bringing services back under public control is 'not a panacea'