Two major UK bus groups may apply for a judicial review of the government's handling of the introduction of free travel for pensioners in England.

There is growing discontent within the bus industry about the way in which operators are reimbursed for carrying pensioners and disabled people for free.

While there are national arrangements for compensating operators in Scotland and Wales, in England there is a postcode lottery, with each district council able to take a different view on how much they should receive.

A senior industry source told Transit that it now seemed that the government had not put aside enough money to pay for the scheme. Fearing that they will be left to pick up the bill many authorities have cut the level of reimbursement to operators. The patience of two of the UK's 'Big Five' groups is now understood to have reached breaking point. Both groups are seriously considering a legal challenge that could embarrass the government. "It's a big firework waiting to explode," Transit was told.