Passengers had been braced for the prospect of widespread cuts to routes across the region, as operators struggle with the ongoing effects of the coronavrius pandemic.
Services, many of which are still waiting to return to their pre-Covid levels of use, were granted a temporary reprieve last month, with the news of more funding to prop them up until October.
But ministers’ announcement of an additional package worth almost £7 billion to upgrade transport schemes throughout the UK has been welcomed by travel chiefs.
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Tobyn Hughes, managing director of Transport North East and director general of Tyne and Wear Metro operator Nexus, said: “This announcement is great news for the region. The government has clearly recognised how important bus and Metro services are to the North East.
“The award of £7.3m of funding for the Metro will allow services to be fully maintained over the next few months.
“Furthermore, I am very pleased that the government agrees that our Bus Service Improvement Plan is worthy of major investment.
"We put forward a very strong plan, developed collaboratively with bus operators, Nexus, local authority partners, and a range of other supporters of bus services.
"This has been recognised by a funding award of £163.5 million over three years.”
Under the latest deal, the North East is in line for at least £73.8 million in capital funding to spend on the busiest bus routes and a further £89.8 million in revenue funding to support improved fares and services – believed to be one of the highest allocations in the country.
In total, 31 counties, city regions and unitary authorities have been chosen for funding, which ministers hope will make “the bus a natural choice for everyone”.
Transport Secretary Grant Shapps said: “Buses are the most popular way of getting around in this country – but for too long people outside of London have had a raw deal.
“The investment we’re making today to ramp up the bus revolution will drive down fares at a time when people’s finances are tight and help connect communities across England.”