The service has proved popular with pensioners in Strathclyde

The group behind Scotland's largest concessionary scheme had warned that it had been so popular that it was facing a �15m funding crisis.

The Scottish Executive said there will be further resources available to keep the scheme going.

The scheme was first launched nationwide at the end of September 2002.

It lifts a lot of anxiety from the councils' shoulders and keeps the scheme running John Lafferty North Lanarkshire councillor

The 12 councils running the scheme in Strathclyde, which provides free bus and ferry travel to 350,000 pensioners, have warned the executive that they face a funding shortfall this year.

An executive spokeswoman said: "Ministers have always been committed to the success of the concessionary fares scheme and proper funding for it.

"We had a constructive meeting this afternoon in Glasgow, and offered an interim payment of �5m to secure the scheme well into the New Year.

"And we are confident that further discussions will secure the scheme for the longer term."

North Lanarkshire councillor and convener of the Strathclyde scheme, John Lafferty, welcomed the extra payment, which is expected to be made in mid-December.

He said: "I'm glad we have got this decision from the executive.