Proposals to bring buses in Manchester under public control will be put out for consultation next week, prompting a warning from one of the biggest operators that it would mean a “massive bill” for local taxpayers.

Greater Manchester combined authority (GMCA) has given the go-ahead for a three-month public consultation that could result in the city region implementing a London-style franchising system for buses.

Manchester is the first to use new powers given to metro mayors to re-regulate buses under the 2017 Bus Services Act, in a key moment in a long campaign by the mayor, Andy Burnham, to overhaul the city’s transport services.

Under the proposals bus routes, timetables, fares and standards would be brought under local control, with bus companies contracted to run the services and any profits reinvested.

The GMCA vice-chair Brenda Warrington said: “We need better bus services. We want to give people the real choice to leave their cars at home, reduce the number of vehicles on our roads and their harmful emissions, so we have cleaner, greener neighbourhoods.”

But Stagecoach, the biggest of 16 bus companies operating in Greater Manchester, said the scheme would incur huge costs. It has suggested an alternative “partnership” option, whereby operators would invest in improvements including integrated ticketing and electric buses, which it says would be cheaper and quicker to deliver than through franchising.

A Stagecoach spokesman said: “It’s crucial that both the people who use the bus, and those who don’t, have their say on the future of bus services, because local taxpayers would ultimately foot the bill for franchising. Manchester deserves a Manchester solution, not the financial burden of a London-style system.”

He said London’s franchised bus network cost local taxpayers £700m a year. “The huge cost of franchising our buses could be better spent on investing in social care, schools and policing, as well as tackling crippling road congestion, which is the biggest barrier to providing better and more attractive bus services.”

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Burnham has called for more government subsidies for the north to make services affordable.

The campaign group Better Buses for Greater Manchester, which found that a further 19 routes were cut back in the city last month, welcomed the consultation. A spokeswoman said: “‘We’ve been paying through the roof for unreliable buses for too long, while bus company directors and shareholders make a killing. That’s why 76% of us support our buses to be brought into public control as London’s buses are.”

The consultation will run until late January 2020, before GMCA responds with a report. Burnham will then make a decision on whether to implement bus franchising.