A row over the cost of free bus travel in Oxford could be resolved by Government ministers.

At the heart of the disagreement is the fact neither the city council nor Oxford's two major bus operators - Oxford Bus Company and Stagecoach - can agree on the amount free travel actually costs.

The issue affects pensioners and those eligible for bus passes.

Instead of paying concessionary fares, OAPs are now entitled to free travel anywhere within the city limits, with the city council picking up the tab.

However, bus operators claim the amount of money the Town Hall is offering companies in compensation is not enough.

City council transport and parking manager Graham Smith said: "The two main bus companies have lodged an appeal with the Department for Transport on the reimbursement proposals the council has put forward.

"However, it has been agreed by all parties concerned to defer the determination of the appeal until all 2006/07 usage statistics are known, a pass holder survey has been carried out and there have been further discussions between the interested parties.

"The appeal is due to resume - assuming no agreement is found - in May."

Asked what sort of money was at stake Mr Smith added: "We literally do not know.

"They could carry on with the appeal and the DfT decide we have to pay more. At this stage we just do not know."

Free travel entitlement is estimated to cost the council £2m a year.

And next year, pensioners will be able to travel free anywhere in the country.

Confusion has reigned over concessionary and free bus travel schemes.

Last year, a pensioners' meeting was told they would be entitled to free bus travel across district boundaries once the scheme started.

In fact, they can only travel within the city free - and only after 9am.

Helen Le Fèvre, Oxford Bus Company commercial director, said: "The company is still involved in talks with the council in an effort to reach a satisfactory conclusion.

"Both the council and us have agreed to put matters on hold until a whole year's data has been collected.

"We will then resume the discussions in the hope we can reach an amicable conclusion. There is a detailed procedure laid down by Government to resolve matters if agreement can't be reached.

"There are tight, inflexible deadlines involved and so we had to lodge an appeal with the Department for Transport as a procedural matter.

"We hope we can reach agreement with the council enabling us to withdraw the appeal without it ever needing to be addressed by the DfT."

Stagecoach spokesman Chris Child added: "We have lodged an appeal, but that is on hold at the moment.

"We are waiting for data to come through on concessionary fares and we hope a settlement can be arranged rather than going through the appeal process."