Bus operator Stagecoach has been penalised after a public inquiry found it had failed to run a reliable service in Oxford.

Western area traffic commissioner Philip Brown ordered the company to repay £23,850 of fuel subsidy.

Three years ago, Stagecoach had to pay £97,000 for failing to meet required operational standards.

The latest survey was carried out to see what progress had been made.

Bus monitors who visited Oxford last March found that, of 657 journeys expected, 36 failed to run, 49 were more than five minutes late, eight were more than five minutes early, and a further 54 failed to run frequently enough on busy routes.

Mr Brown said this resulted in an overall failure rate of 22.4 per cent.

Under conditions set by the Department of Local Transport and the Regions, an average of 95 per cent of buses should run within five minutes of their scheduled times.

Stagecoach South Midlands operations director James Freeman argued that the failure rate was only 9.6 per cent, if special circumstances were taken into account.

These included severe staff shortages and long-term roadworks, particularly on Banbury Road.

Mr Brown said the operator had made great strides since 1999, but the levels of congestion and employment issues were not a "reasonable excuse" for the failings.

The commissioner decided not to attach any condition to Stagecach Oxford's operators' licence. But he ordered the firm, which runs 200 vehicles, to repay the fuel duty rebate -- five per cent of the amount it received for a three-month period.

Last year, the company agreed a 24 per cent pay increase for drivers to try to attract more to the city.

Stagecoach South Midlands spokesman David Whitley said this had brought major improvements in reliability across the network.

The move also led to a rise in fares and a restructuring of the company's bus network.

Mr Whitley outlined other improvements made since the checks had been carried out.

Bus timetables had been revised to allow extra time at busy periods, and extra supervisory staff recruited.

An extra £750,000 was spent recently on extra buses to improve reliability.

Driver recruitment had also continued to be a high priority, he said.

Mr Whitley added: "At the inquiry, we argued that a reliability rate of 90.4 per cent was as high as any bus operator could reasonably have been expected to achieve in the circumstances. However, we are also aware of the standards we are expected to meet and we have to accept that -- for whatever reasons -- we failed to achieve them.

"During 2001, we carried over a million more people on our buses than in 2000 and such achievements can only be repeated by clearly focusing on running a consistently reliable service."