A reorganisation of rural bus services is on the cards for the second time in seven months, it was announced last night.

Durham County Council warned it would be forced to cut or reduce services to avoid a looming financial crisis.

The council blamed spiralling fuel costs for the need to revise the subsidised bus timetable seven months after some services were withdrawn and others reduced to help the authority avoid a £700,000 overspend.

At the time, the authority said it would try to minimise the impact of cuts by only scrapping little-used services.

Now it is faced with the decision of ordering more cuts in the face of relentless cost increases - and more could be on the way as the council tries to avoid going £600,000 into the red.

In November, the council announced that more than 60 routes were to be affected in some way.

Yesterday's announcement will hit a further 18, said Councillor Bob Pendlebury, the county council's cabinet member for transport.

Higher costs and increased fuel prices mean it will cost the authority £425,000 more than expected to keep subsidised routes running - money the council does not have.

With the authority facing a £175,000 overspend carried over from last year, council finance chiefs have warned that the time needed between identifying and implementing cuts that would have the least impact means the final bill could be as high as £900,000.

With no spare cash to bail it out, the council is having to find the money from within the present subsidised routes, which account for about 20 per cent of all bus routes in the county.

The changes are likely to come into effect by August.

This year, the council is spending £3.25m to subsidise bus services that would otherwise have disappeared because the operators consider them unprofitable.

But every year, more services cease to become commercially viable for the bus companies to run and fall into the subsidy "net".

Coun Pendlebury said: "As bus operating costs continue to increase beyond inflation, the county council is hit in three ways.

"The money we have available buys less and we have to make cuts to stay within budget.

"More commercial routes become unprofitable to run and the bus companies look to the council to provide new funding to support them.

"Further bus service reductions have to be made at one end of the list of subsidised services to pay for these new priorities coming in at the other."

He said that it was up to the bus operators to consider how the council's search for savings would impact on the services they ran.

Coun Pendlebury added: "Using special criteria, taking into account such factors as level of usage, subsidy cost per passenger, the availability of alternative bus services and accessibility to key services such as health, education, employment and shopping, we have suggested some routes which we believe will have the least possible impact."

* More than 1,000 people have signed a petition protesting at bus service cuts in Middlesbrough. People living in the town's Nunthorpe and Ormesby areas say they feel isolated after Arriva withdrew buses to the main hospital, supermarkets and a medical centre. ä Services under threat - Page 10