MSPs have backed proposals to allow Scottish councils to run their own bus services.

Amendments to the Transport (Scotland) Bill at Stage 2 were passed at the Scottish Parliament’s Rural Economy and Connectivity Committee, paving the way for the move.

The first amendment, tabled by Labour, would allow every council in Scotland to run bus services, while the second, by the Scottish Government, would allow councils to set up arm’s length bus companies.

Scottish Green MSP John Finnie, a member of the committee, said: “I’m delighted we’ve finally ditched Thatcher’s ridiculous bus laws.

“Empowering councils to run their own services is a significant step which I believe will lead to better services for bus users across the country.

“Three-quarters of public transport journeys are made by bus, yet the number of journeys has been falling year-on-year as services were reduced and routes slashed. Over the past year, my Better Buses campaign has collected testimony from hundreds of bus users across the country who are crying out for cleaner, affordable and more reliable services. Today I believe we’ve taken a step toward delivering that.”

Friends of the Earth Scotland campaigner Gavin Thomson said: “This is a great step forward for public transport in Scotland.

“Private bus operators have failed in many areas of the country, leaving us with declining bus passenger numbers, ever-increasing fares and a fragmented network that serves company greed rather than community needs.

“Giving councils the powers to run their own buses allows us to re-imagine what our public transport should look like.”

Ellie Harrison, of the Get Glasgow Moving campaign, said: “This is a huge chance to get the public transport system that passengers want. A publicly-owned bus company for Glasgow could start taking over routes one-by-one, and use profits from busy routes to reinstate essential bus services axed by First and Stagecoach.

“Buses are vital public services, which provide both social and environmental goods. They are not a ‘market’ and should not ‘compete’ with trains, Subway, trams or other forms of sustainable transport.

“These new powers are fantastic and now we need the investment to follow, that would provide a comprehensive, integrated network so that everyone can get where they need to go easily and cheaply and with the lowest environmental impact.”

A Scottish Government spokeswoman said: “The Scottish Government’s amendment will allow local transport authorities to set up a companies which would operate in a similar manner to Lothian Buses, providing local services within a commercial market.

“Transparency will be key, with local transport authority companies operating in the same way as any other commercial bus operators and subject to all the usual registration and licensing requirements.”