SNP ministers at Holyrood were last night attempting to fend off damaging claims that the hugely successful concessionary bus travel initiative for the over-60s could be cut back. The Scottish government is being accused of rasing fares by drastically reducing funds for the scheme over the next three years.

Labour and the Liberal Democrats joined forces to claim that a government review of the Scotland-wide scheme, due to start this week, would mean that fare reimbursement for bus companies would be capped as part of the impact of a reduced Budget.

They also claimed that the fall in funding threw up the prospect of changes in the age eligibility rules of the scheme - bringing it up to 65 rather than the present 60 - or bus operators having to either cut services or raise fares to bridge a funding gap.

Their concerns appeared to be backed up by Neil Renilson, the chief executive of Transport Edinburgh, who said in a BBC radio interview: “If you want to buy more of something than you can afford - which is basically the position the government is in - you scale back the amount you actually buy. In the case of concessionary travel, that would mean making changes to the scheme so that [fewer people] are eligible in future years.”

However, the Nationalist administration last night robustly denied the claims of cutbacks and accused the opposition parties of scaremongering.

The scheme, which gives about one million pensioners and disabled passengers free bus travel anywhere in Scotland, has been hugely successful since it was introduced by the previous Labour/Liberal Democrat Scottish Executive in April 2006 with a take-up of about 90 per cent. It would appear politically hazardous for the minority SNP government to pare back the scheme, especially since over-60s are one of the most likely age groups to vote in elections.

In a Parliamentary written answer last week, Stewart Stevenson, the Transport Minister, said that in real terms the government budget allocation for the scheme would fall from the present £189.4 million to £179.4 million in 2010-11, a drop of £10 million.

Des McNulty, Labour's environment spokesman, said that the problem had arisen because the Scottish government had not put enough money into the scheme. He said: “We feel that concessionary travel is the biggest thing that devolution has delivered to the people of Scotland, in particular the pensioners. The retention of that scheme in its present form is a priority. Any restrictions which are imposed will take away from its value.”

Mr McNulty claimed that bus operators had said that a fall in real-terms funding meant changes would have to be made to the scheme so that fewer people were eligible. “We are calling on Stewart Stevenson to issue a clear statement reassuring Scotland's pensioners that they will not lose out as a result of the SNP's review,” he said.

Alison McInnes, for the Liberal Democrats, said that bus operators may be forced to put up fares for other passengers to keep this scheme running for the over-60s. She accused Mr Stevenson of “bluster” by claiming that government support for the scheme was increasing when, in real terms, it was actually falling.

Lindsay Scott of Help The Aged in Scotland said that bus operators' costs were going up and if there was less money going into the scheme, it could affect its sustainability in its present form.

Under the concessionary travel scheme, bus operators receive from the government a single payment rate of 73.6 per cent of the average adult single fare on any route to compensate them for the revenue that passengers would have paid in fares if there was no such scheme.

A Scottish government official said that it was “patent nonsense” to suggest that any change in the age of eligibility for the scheme was planned. “We are specifically excluding that from the review, which is a review ... initiated by the last administration. Indeed, we are discussing the best ways to proceed and looking at ways to extend the scheme to cover more disabled groups.”

He also pointed out that a cap system for fare reimbursement for operators had been in place since the scheme began.

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