PASSENGERS on London's Tube trains and buses face yet another exorbitant New Year hike in fares, according to transport watchdog London TravelWatch.

Brian Cooke, chairman of London TravelWatch, said: "We are extremely concerned about the exorbitant cash fares on buses, which rise by a third, from £1.50 to £2, and on tubes in Zone 1, passengers will see a single fare rise to an astronomical £4 - even if they only go one stop."

"This will especially hit infrequent visitors and tourists to London who will not necessarily benefit from the cheaper prices available when using Oystercards."

From January 2, peak bus fares with Oyster are frozen at £1, which now becomes a single flat Oyster fare throughout the day, but cash users will pay £2 for the same journey - a 50p increase in price.

All Oyster single fares are frozen across London and the Oyster daily price cap for adults remains 50p below the One Day Travelcard price.

Mr Cooke said the fare increases could drive people away from public transport back to cars and taxis and that would be deeply disappointing.

The Mayor of London Ken Livingstone announced two years ago that bus fares would rise by 10 per cent above inflation for three subsequent years to help fund the investment programme on London transport.

Mr Livingstone said: "There are now huge savings to be made by using Oyster. We have been able to freeze many Oyster pay-as-you-go bus and Tube fares this year. Many now cost half the same journey paid by cash."

But Mr Cooke said: "The above-inflation price rise on rail fares is more than disappointing and will seem a particularly bitter pill to passengers in the London area, who are increasingly faced with crowded trains and crowded platforms."