Mayor of London Ken Livingstone this month announced that, since the start of the controversial scheme in February, the number of cars entering the capital's congestion zone had decreased by 38%.

Jay Walder, director of finance and planning of TfL, warned that this meant revenue from congestion permits would be less than forecast.

'Our estimate has been £130m of revenue on an annual basis. My expectation is that there will be a significant shortfall against that estimate,' he said. Revenues from the congestion charge had been intended for improvements to bus services.

Walder stressed that the project had not been about raising money, but about making the transport system function more effectively, and therefore the organisation was 'very happy' with the results.

Nevertheless, planned bus improvements will need to be paid for and the congestion scheme is not delivering its budgeted cash. Walder said the £2.3bn total budget offered some flexibility, but he may be forced to look at contingency resources.

'We're looking at places where we can get further efficiencies out of services that we have - some of which may well be within bus services,' said Walder.

Walder will also have to revise his five-year business plan because of the downfall in congestion permit revenues. He aims to present a revised plan to the TfL board for consideration in late October.

'The revised business plan will accommodate a lower estimate of revenues,' he said.