Stagecoach, one of Britain's largest bus operators, has warned that the "dysfunctional" structure of local government will hamper the roll-out of a national road pricing network.

Chief executive Brian Souter said one of the central recommendations of last week's transport study by Sir Rod Eddington faced significant obstacles at the local political level.

In the report, the former head of British Airways described a nationwide scheme that charges motorists up to £1.28 per mile to use busy roads as a "no brainer".

Pointing to a decline in bus use outside London, Mr Souter said local transport bodies - such as the passenger transport executives (PTEs) that run buses and trains in Manchester and Birmingham - will need an overhaul for road pricing to work.

"The big issue for government about this congestion charging is that local government structure is a problem for economic development in metropolitan cities. There is an issue about how we deliver these projects in major cities. It is very dysfunctional," he said.

The government unveiled plans last month for a bill that will shake up local transport authorities, but Mr Souter warned against increasing the powers of PTEs, who have no control over roads despite their power over public transport.

Stagecoach also announced plans to return £400m to shareholders. The plan, revealed alongside first-half results that showed a 34% increase in pre-tax profits to £77.4m, follows the disposal of the group's London and New Zealand bus operations.

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