Transport firms have welcomed the announcement of a Government bailout package to ensure services continue to operate during the coronavirus pandemic.

Stagecoach said the decision will “enable key workers to continue to travel” while FirstGroup confirmed it has received “the necessary support to continue running bus services”.

Demand for buses has fallen by about 90% due to the virus.

The Department for Transport announced on Friday that bus companies in England will receive £167 million in new Government funding to help them cope with the loss of revenue.

Operators will be required to maintain up to 50% of normal service levels and allow adequate social distancing space between passengers under the conditions of the new funding.

The package, which has been agreed with bus operators, will be paid over a 12-week period under the new Covid-19 Bus Services Support Grant.

Support for the sector in Scotland and Wales has previously been announced by their devolved governments.

Stagecoach chief executive Martin Griffiths said: “We would like to thank the respective governments and our local authority partners for their support through this very challenging period.

“It is welcome recognition of the importance of maintaining bus services at this time and it will enable key workers to continue to travel to and from work, as well as ensuring communities can still access food, medical care and other essential services.”

FirstGroup chief executive Matthew Gregory said: “I am pleased that by working with the DfT, devolved government and local authorities, we are demonstrating that we are able to secure the necessary support to continue running bus services, recognising the unique and essential role they play in sustaining our local economies and communities.

“These arrangements will enable us to continue working closely with councils and our other local stakeholders to ensure that key workers can reach their destination, be it hospitals, supermarkets or distribution centres.”

Anthony Smith, chief executive of passenger watchdogs Transport Focus and London TravelWatch, said: “Around half of bus passengers tell us that the bus is the only real means of transport available to them, so it is right that the Government has recognised the exceptional circumstances posed by coronavirus.”

Manuel Cortes, general secretary of the Transport Salaried Staffs Association, said: “Sadly after 10 years of Tory cuts, our buses were already running just skeleton services to far too many of our communities.

“It’s good that the Transport Secretary has at last realised the strategic importance of buses to keep key workers moving. What we now need is for the Government to be bold and take the logical step to bring our buses into public ownership where they belong.

“A publicly-owned, truly integrated public transport can transform the way we travel and help tackle climate change for a cleaner future for all of us.”