Greater Manchester’s planned ‘Oyster card’ style smart ticketing service has hit a major crisis, the MEN can reveal - after transport chiefs ditched their contractor.

Transport for Greater Manchester has torn up its agreement with private firm Atos after ‘considerable’ delays to the service’s roll-out.

Bosses said it had become apparent the firm ‘cannot deliver’ what they had been signed up to do.

Atos is now handing TfGM ‘substantial compensation’ for the fiasco, although it remains unclear whether taxpayers will still be out of pocket after that or not.

The revelation is a major embarrassment both for council chiefs and the government, which had put smart ticketing a the heart of its ‘northern powerhouse’ plans.

In a joint statement not released to the press but circulated to councillors, TfGM and Atos said: “TfGM contracted Atos in 2012 to design, build and operate a Smart Ticketing System for Greater Manchester to be rolled out initially on Metrolink and with options to roll the system out subsequently to bus and rail.

“Although the system is currently operational for use by our 500,000 concessionary card holders, after a considerable period of delay it has become clear that Atos cannot deliver the smart ticketing system as contracted.

“Therefore, the parties have decided that it is in their best interests to agree to a mutual termination of the contract, on commercial terms, the details of which, remain confidential between the parties, but which provide substantial compensation to TfGM in respect of the costs incurred and which will enable TfGM to develop a Smart Ticketing System with alternative providers.

“Atos are collaborating with TfGM to ensure that the existing services are maintained and transitioned to new providers.”

Tram users will be familiar with the yellow ‘get me there’ boxes on stations across the network, although only people with concessionary passes had so far been able to use them.

They will still be able to, according to TfGM, but the roll-out more generally will now be redesigned.

One town hall insider suggested that working with the region’s bus operators to establish a streamlined fare structure may have been a stumbling block - but added that ‘it should have been possible’ to roll out such a service across the tram network, all of which is controlled by TfGM.

We revealed earlier this summer how TfGM had already spent millions on consultants for the scheme, which it insists will go ahead.

A spokesman added that given the fast-moving pace of technology and plans for bus devolution, it was ‘only right that TfGM re-thinks its approach to the Get Me There scheme to ensure that it is flexible and fit for the future’.

They added: “This has allowed TfGM to bring in a range of experts to look more closely at just what customers want and how we expect their needs to change.

“Therefore, whilst we continue to run the existing Metrolink scheme for our 500,000 concessionary card holders, we will now look at all possible options to deliver the best possible outcome for customers as we move towards a far more integrated world class transport.”

Further announcements are expected later this year, they added.