A bus company claims it has had to lay off staff after losing £160,000 in income because Bradford Council e-mailed schools wrongly stating it no longer had an operator's licence.

Paul Burke, owner of Wrose Travel in Otley Road, Bradford, has complained that the Council was pre-emptive in its action as, although the company did have its licence revoked by the Traffic Commissioner, it has been granted a stay of that decision pending an appeal.

Mr Burke said: "We have been allowed to trade all the way through this period. At no time was our licence not valid but because the Council sent out this e-mail people now think we have been operating illegally."

He said since September the company has lost £160,000 and has had to lay off 11 employees.

Much of the company's business comes from schools and community groups. Mr Burke said: "We had a letter from one school, Allerton Primary, questioning why we transported 90 children and ten adults without a licence.

"This has damaged our company dramatically. The schools don't want to touch us because they think the Council is right and we are wrong." Mr Burke said that he was under pressure from the bank and his company's financiers over the downturn in the business.

He is due to meet David Preston, the Council's head of service performance, and Errol Guest, social services general manager for transport, tomorrow.

A Council spokesman said: "I can confirm we have got a meeting tomorrow. It would be inappropriate to comment at this stage."

Wrose Travel had its licence revoked by the Traffic Commissioner at a hearing in Leeds on Thursday, August 17, but an appeal was lodged immediately and the company was granted a stay. The company is awaiting the outcome of the appeal, heard by the Transport Tribunal in London on Thursday, October 12.