Oyster card bus and tram fares cut by 10p

The price of a weekly bus pass on Oyster was reduced from £14 to £13 in moves unveiled by Ken Livingstone. Cash fares remain at £2 per journey.

The Mayor said transport would become part of the "election battle ground" between him and Conservative challenger Boris Johnson.

Mr Livingstone said: "When I came in, the buses were a rundown service, underfunded and underused. We now have more people than ever using the buses. That is why it will be an election issue."

He added that the cut would help some of the poorest people in London.

He said: "The buses go equally north and south of the river and across all the zones so it is fairer to cut fares on them as opposed to the Tube.

"I would love to be able to announce a cut to Tube fares as well but the train operating companies have the right to ask for a rise of inflation plus one per cent as part of their deal on the Tube.

This cut has cost around £36 million which we have raised from the increases in passengers. But a cut on the Tube would cost hundreds of millions of pounds and we don't have that kind of money."

Transport Commissioner Peter Hendy, who joined Mr Livingstone at the launch of the new fares, said the system would be able to cope with extra passengers tempted on to the buses by cheaper fares.

He said: "We have the best bus service in terms of reliability that we have had since 1958.

"This was borne out last year when almost two billion people travelled on London buses, the highest number since the Sixties. The cut to the price of the weekly bus pass also means this is the cheapest big city in the country to travel around by bus."

The cut was introduced overnight - a move made possible by the electronic system which is centrally programmed. It is the latest variation in fares made possible by Oyster.

Discount fares for people on income support were introduced in August, with half-price bus and tram travel.

More than 10 million of the swipe cards have been issued. Its popularity has led to credit card companies producing a "super Oyster" which can be used to pay for items under £10 in some shops. Experts believe London is heading for a "cashless Zone 1", with almost all financial transactions taking place electronically.