A £1bn Government bailout for Transport for London is reportedly being offered with conditions including fare hikes, extension of the congestion charge and the end of free travel for pensioners.

According to Sky News, TfL is holding out for around double the amount offered, with the network facing another drop in revenues as the capital transitions into Tier 2 restrictions.

TfL was previously bailed out with a £1.9bn package in May, after its passenger income reduced by 90% compared to last year at the peak of the pandemic.

A source close to the Mayor reportedly told Sky the Government is demanding fare hikes, an extension of the congestion charge and the end of free travel for the elderly and children.

Cutting free travel for under 18s was a condition of the Government’s previous bailout, however it was subsequently negotiated that this would be pushed back to spring 2021.

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The source told Sky: "Conditions such as extending a £15 congestion charge to the North and South Circular and taking free travel away from children and older people would be totally unacceptable to the mayor and he would not ask Londoners to accept them in these exceptionally difficult times."

Last month, Sadiq Khan warned that London's entire economy will be at risk if the Government fails to provide a second bailout.

The Mayor said that further funding is need to ensure sufficient services can run to enable social distancing and allow upgrades to "nationally important" ageing infrastructure.

TfL claims that £2bn will be required for the second half of 2020/21, and it is anticipated that a further £2.9bn will be required during 2021/22 to stabilise the network’s financial position.

A TfL spokesperson said: "We continue to discuss our immediate funding requirements with the government and hope these discussions can be concluded successfully soon, so we can help London through this next phase of the pandemic.

"We are doing what we can to minimise costs and aim to continue operating a full service across our network while our funding discussions continue."