The body which is responsible for the capital's transport network, Transport for London (TfL) could be facing a budget deficit of �800m in three years' time, BBC London has learned.

Transport Commissioner Bob Kiley is expected to outline the figures to the TfL board in two weeks' time when he presents his six-year business plan.

One reason for the possible overspend is the heavy investment in new bus services which London mayor Ken Livingstone has initiated.

TfL could not confirm the figures and told BBC London it cannot comment on a document the board has not yet seen.

Fares threat

TfL's budget for 2002/3 is �1.1bn. most of which goes on the buses.

The funding comes from central government, fares and council taxes.

But BBC London understands that without extra government cash, bus fares may have to go up and even council taxes if there is a shortfall.

TfL does not yet have responsiblity for the Tube system which is only handed over when the public-private partnership (PPP) scheme comes into force.

I think passengers are getting more and more used to the better bus services and we've got to keep raising their expectations

Mike Weston, London Buses

So better and more reliable buses is central to Ken Livingstone's policy of introducing congestion charging in the capital in February 2003.

With the Tube at capacity in peak periods only the buses can absorb passengers who decide to leave their cars at home.

Spending money on buses is also a short-term way of improving public transport and that investment led to a 6% growth in passenger numbers last year.

Mike Weston of London Buses said: "I think passengers are getting more and more used to the better bus services and we've got to keep raising their expectations and carry on improving that service year on year."

Government cash

Every weekday over four million bus journeys are made compared to three million on the Tube.

But those expansion plans may have to be put on hold or services even cut if the bill keeps rising.

The Mayor is asking central government for a funding increase to prevent that happening.

But it will not be known if that is forthcoming until the Treasury spending review in 2004.