Public transport users in London will be hit by fare increases and restrictions on free travel due to the Government’s £1.6 billion bailout of Transport for London (TfL).

Mayor Sadiq Khan accused the Department for Transport (DfT) of “making ordinary Londoners pay the cost for doing the right thing on Covid-19”.

The department said it included a series of caveats as part of the funding package “in order to safeguard services in the future”.

Temporary measures consist of stopping free travel for children and only allowing people over 60 or with a disability to travel for free outside peak hours.

Fares on buses – scrapped to help protect drivers from Covid-19 – will be reintroduced, and the congestion charge for people driving into the centre of the city will resume.

These changes will take place “as soon as practicable”, the DfT said.

The department also announced that TfL will introduce above-inflation fare rises from next year. Fares will go up by RPI+1%.

Mr Khan has frozen single fares since he became mayor in May 2016.

The bailout consists of a £1.1 billion grant and a £505 million loan.

Mr Khan said it was “not the deal I wanted but it was the only deal the Government put on the table”.

He went on: “I had no choice but to accept it to keep the Tubes and buses running.

“Fares income has fallen by 90% in the last two months because Londoners have done the right thing and stayed at home – so there simply isn’t enough money coming in to pay for our services.”

The DfT said the agreement means TfL will increase service levels “as soon as possible to ensure people can follow social distancing guidelines while on the network”.

Concerns have been raised about packed Tube trains and buses this week after the Prime Minister encouraged people in England to go to work if they cannot work from home.

A London Covid-19 Task Force – featuring representatives from the Government and TfL – has been established to oversee operational decisions during the pandemic.

The Government will immediately carry out a broad-ranging review of TfL’s finances and structure, which will includes “the potential for efficiencies”, the DfT revealed.

Two “special representatives” will join TfL’s board on behalf of the Government “in order to ensure best value for money for the taxpayer”.

TfL has been in talks with ministers for several weeks over a grant, as it requires £3.2 billion to balance its proposed emergency budget for 2020/21.

On Thursday, Mr Khan warned that TfL would need to reduce services unless an agreement was reached by the end of the day.

A decline in passenger numbers of 95% on the London Underground and 85% on buses due to the coronavirus lockdown has caused a 90% fall in TfL’s income.

Transport Secretary Grant Shapps said services must be increased to “support social distancing and ensure our capital keeps moving”.

He went on: “This deal will encourage a real move towards greener and healthier walking and cycling options, ease pressure on our public transport and provide certainty and stability for London’s transport services in the future.”