Preston Bus was forced to sell out to bitter bus war rivals Stagecoach because of the Government, it was claimed today.
Managing director of Preston Bus Peter Bell said plans by ministers to change the rules on fuel tax, introduce the new Transport Act and "suggestions that operators should not be fully reimbursed for carrying customers with concessionary bus passes" could have "seriously undermined" the business.
Mr Bell told the Evening Post bus firms currently get back 80% of fuel tax paid on diesel, but the Government has announced it is to change that.
The new Transport Act also gives local authorities more control over routes and fares, which could have hit the business financially.
In a statement to the Stock Exchange, Mr Bell said: "The company faced an uncertain future as a result of the current economic climate and legislative changes, including the new Transport Act, the Government's plan to change the fuel tax arrangements for bus operators, and suggestions that operators should not be fully reimbursed for carrying customers with concessionary bus passes.
"All of these issues could have seriously undermined the business and, as a result, the directors decided it was in the best interests of employees and the business to approach potential purchasers."
Mr Bell is to leave the company after the estimated 6.4m deal, making Preston Bus Ltd part of the Stagecoach empire, was rubber-stamped on Friday.
He went on to say he was "pleased to have sold the business to Stagecoach, which offered the best opportunities for our staff".
But union bosses told the Evening Post staff were fearful for the future once a two-year job guarantee for drivers and engineers came to an end.
Questions are also still being asked as to whether cash from the sale should be shared among all employees, not just shareholders, because an employee trust at the firm owned 53% of the company's shares.
>> How Preston's bus wars have been fought
>> Stagecoach to buy 'bus war' rival
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