The council says it wants to encourage more operators to come into Bristol, to improve services and drive down prices. Critics say the move is just a "smokescreen" and could result in service cuts.

The authority pays £4,277,759 of taxpayers' money to subsidise routes – 24 run by First, 21 by Wessex Connect and two by Buglers – every year.

Services affected include the First 8/9 Temple Meads Circular; the night flyer buses by Wessex Connect, the park-and - ride services by both companies; the 500 Harbour Link and the 952 school bus by Buglers.

The supported journeys operate mainly in the morning (about 5am to 7am), evenings (mostly after 7.30pm), Sundays and bank holidays. Bus operators say they need the subsidies as the routes are not used enough to be commercially viable without support.

Normally the council would only put a small number of routes out to tender at a time.

But from September all the subsidised elements of the 47 routes will be put together in three or four packages that operators, including First, will be able to bid for. The authority would still subsidise the routes but could end up paying less to prop them up.

City council cabinet member for transport Gary Hopkins said: "This isn't going ahead on a basis of cuts. Competition is good for business – other cities have lower weekly bus fares.

"What we've had in the past is operators saying 'we're not making a profit, we need a subsidy or we're going to take it off'. We're still going to be subsidising them, we want to see how much subsidy operators will ask for to run these routes. The key thing is we need to get fares down, and the only way to change that is to get more competition.

"While things like smart cards and improved enforcement of bus lanes may not seem that big, bus companies are now saying to us Bristol is a good place to do business, which wasn't the case a few years ago."

In theory, one operator could run subsidised services and another run the unsubsidised buses on the same route. Mr Hopkins argued it was more likely the operator who runs the majority of services on a particular route would agree to run the subsidised journeys as well, but at a loss.

Campaigners argue this approach is not realistic, and point to previously subsidised bus services such as the 52, that were cut despite public outcry.

Campaign for Better Transport spokesman Dave Redgewell said: "First and Flights Hallmark (Wessex Connect) are the only companies big enough to bid for these sorts of tenders. The council is not going to get more operators in the middle of a recession.

"Buses are big businesses. Operators want the daytime services, not the night-time services. We're very concerned this is just a smokescreen to cut services. They need to create an integrated transport authority to get control of the network. The name on the side of the bus isn't the issue. It's whether they run on time, whether they're clean and have low floors."

The council aims to have the tender process completed by next summer.

A First spokeswoman said: "The Council is perfectly within its rights to re-tender those bus services it supports. As and when they put the revised tenders out we, like I am sure many other operators, will consider whether we wish to submit a bid for them."

A Wessex Connect spokesman said: "We're very interested in engaging in the tendering process for any work the council will be tendering that we can provide a proper level of service for, whether that's work that we already carry out or work we don't."