Brighton and Hove bus drivers have won an inflation-busting seven per cent pay rise, bosses said today.

Brighton and Hove Bus and Coach Company bosses said the increase was needed because of the spiralling cost of living in the city, particularly the price of housing.

Unions said the deal bucked the recent trend towards smaller pay settlements.

Managing director Roger French said the expanding company had to pay the best rates to attract more staff in a competitive labour market.

Typically, a driver working an optional sixth day of overtime will take home £350 a week when the new rates of pay become effective next month.

Engineering staff will also get a seven per cent increase as part of the package. In all, some 720 staff will get the wage deal.

Mr French said: "Fortunately we are in the position of being able to share our success with our staff by implementing significant pay increases when inflation is at an all-time low."

The company announced last month that it would continue to charge a flat £1 fare on city routes.

New figures show the operator carried nine per cent more passengers in November compared with the same month in 2000.

The company intends to recruit more staff in time to introduce new services and increase the number of buses on some other routes in the spring.

Unions welcomed the deal, which includes improved sick pay arrangements, particularly for longer serving staff.

GMB Union organiser Gary Smith said his members had wanted more but had backed the package overwhelmingly.

He said: "The job of a bus driver is getting harder with increases in traffic congestion and assaults. We are also aware of the spiralling cost of living in Brighton and Hove.

"However this deal does represent a step forward."