Kent County Council has confirmed it is pulling out of its controversial bus and coach operations amid concerns over the actions of a senior employee who has set up a successor company.

The decision to shut Kent Top Travel and Passenger Services will take effect from the end of October. The council is giving up its operator licences for both businesses. Its Canterbury park and ride contract – its final commitment – has been awarded to a new operator. The services have always upset private operators who claimed that KCC enjoyed favourable cost advantages that enabled them to undercut other tenders, a claim denied by the council.

However, Gavin Grant, operations manager for Kent Top Travel who has formed a new company Kent Top Travel Limited, was suspended pending further inquiries after sending an email to clients served by the existing operations.

In the email, he told them he would “remain” as operations manager.

He said: “We are therefore happy to announce that we can offer a continuity of service to all of our clients. As we move forward with this new enterprise, we will be ensuring that not only do we provide continuity, but that you will see an overall improvement in the services we offer.”

Touting for trade from existing clients while still an employee is frowned upon in the private sector. A source in the private bus and coach business said it was akin to insider dealing. Other firms had the right to quote for work but did not enjoy similiar privileged access to the same data.

A KCC spokesman said: “No part of Kent Top Travel, its staff or vehicles will be transferred to Mr Grant nor will any of its contracts be given to him. Contracts have and will continue to be competed for on the open market."

'Contracts have and will continue to be competed for on the open market'

Mr Grant was suspended after the email was brought to the attention of KCC by Kent Business.

In a statement, KCC said: “There have been allegations that he has not adhered to this understanding and, pending further investigations, he has been suspended.”

A hearing was due to take place this week.