Plans unveiled by the Department for Transport have shown the council could receive £1.26m next year to fund the system after originally being budgeted £880,000.

The scheme allows anyone aged 60 and over to travel free on buses anywhere in England and has proved costly for towns such as Whitby which are popular with holidaymakers.

The service faced criticism last year after the council was left with a £981,000 shortfall.

Now the Government has put forward £223m to improve the service nationwide.

Andrew Backhouse, cabinet member for technical services at the council, welcomed the news.

He said: “The core principle of the scheme provides an excellent opportunity for those aged over 60 to travel.

“However, since the system was introduced the council has carried a heavy financial burden and has had to prop it up with subsidies.

“The impact on Whitby was quite heavy because we are a very busy tourist spot and at the start of the scheme the Government failed to acknowledge the impact it would have by the number of people using it.

“We are looking at this as being a positive move and it is very welcomed by the council.”

However, Coun Backhouse added he was a little cautious about the scheme after the Government report said some authorities may not receive extra funding.

He said: “The punchline for me is the news that around 200 authorities could receive more money or actually remain unaffected by the revised distribution, but I’m really hoping Scarborough Borough Council is one of those who does get more support.”

Whitby MP Robert Goodwill raised the issue in the House of Commons last year and said the plan was a step in the right direction.

He said: “What was upsetting for taxpayers in Scarborough was they were funding the journeys of people from outside the town who were visiting for the day using the scheme.

“The scheme in some ways has been a victim of its own success because nationally the Government have spent £1bn on it and there have been a similar number of people taking advantage of it.

“But I think given the experience of the first year of the scheme the Government could be in a better position to move it further forward and I welcome it because it will bring more people to Whitby and help its economy.”

Scarborough’s Labour prospective parliamentary candidate Annajoy David said she was pleased with the announcement.

She said: “This is absolutely fantastic news and I know Whitby pensioners and disabled people appreciate the free bus travel.

“I want to see the council using the money on the community and I want to make sure the money goes on the users and not on administration costs.

“People are saying they like the scheme and we know the pattern of use so the grant can go to where the scheme is used.”

Arriva declined to comment when approached by the Whitby Gazette.