​Fears are growing the Government could take away nearly £1 million in funding from Cheltenham to pay for free bus travel for the over-60s.

Responsibility for running the concessionary travel scheme is set to transfer to Gloucestershire County Council next year.

But borough council bosses are warning that the Government could try to take away more money than it currently donates to the running costs.

John Webster, cabinet member for finance, promised to put up a stiff fight if their fears were realised.

He said: “We are more than happy to give all the Government subsidy that we get allocated for concessionary travel to go to the county council to support this, but will not agree to paying for it all.

“We currently subsidise concessionary travel by some £1 million a year beyond what we get from the Government and it is estimated it will increase.”

The concessionary scheme, which gives free bus travel to over-60s and some disabled people, was introduced in 2006 and extended two years later to provide free travel across England.

But arguments over who would fund the scheme have been growing.

The Government originally gave money directly to the councils, but each district received a different amount and in Gloucestershire, Stagecoach claimed it was still short of what it needed to provide services in some areas.

Because many Cheltenham Borough residents used the scheme, the council was having to use taxpayers’ money to top up the Government funding by £600,000 every year.

A new agreement signed between Stagecoach and the six district councils in Gloucestershire last year took that figure to nearly £1 million.

The borough council originally thought the Government would simply transfer its annual payments of about £1 million to the county council.

It now fears Whitehall might withdraw all of the annual running costs of the scheme – more than £2 million – from Cheltenham’s funding pot and give it to the county council, despite the fact half of this was the borough council’s own cash.

Chief finance officer Mark Sheldon said: “In his pre-budget speech, the Chancellor indicated his intention to transfer the responsibility for administration of concessionary fare from district councils to the higher tier from April 1, 2011.

“Consultation on the transfer of funding will take place this summer. The council will be lobbying for a transfer of the funding originally given to the council for funding the scheme, rather than a transfer of the current costs of the scheme.”

A Gloucestershire County Council spokeswoman said the situation was unclear.

She said: “As far as I understand it, the funding the Government gives to the district councils already will just transfer to us.

“That would be more than enough to pay for the scheme.”

A Government spokesman said the transfer was still under review.