STAGECOACH, the Perth-based bus operator, yesterday won a fresh round in its running battle with the Government over new acquistions, and its shares perked up 11p to 342p.

Competition and Consumer Affairs Minister John Taylor approved Stagecoach's #3m purchase of Chesterfield Transport (1989), a bus company in the English Midlands, following a recommendation by the Monopolies and Mergers Commission.

Mr Taylor said he agreed with the MMC's conclusion that Chesterfield's merger with Stagecoach's East Midlands Motor Services (EMMS) subsidiary would lead to ``increased efficiency, an improved fleet and quality of service and a more innovative approach to developing the bus market in the area''.

This outweighed any disadvantages that might arise from loss of competition or an eventual increase in fares, he added.

Stagecoach agreed to buy Chesterfield Transport, an employee buy-out of the city's former municipal bus company, in July.

But the Government referred the acquisition to the MMC in September because of concerns that it would leave Stagecoach controlling 63% of local bus services in north Derbyshire and north Northamptonshire. EMMS already had a 40% market share in the district and Chesterfield Transport accounted for a further 23% of services.

But the Government concluded that Chesterfield Transport would face a bleak future if the Stagecoach takeover was blocked.

Mr Taylor said: ``The MMC believed that Chesterfield could not have continued as an independent operator and had doubts that anyone else would have been willing or able to make it an effective competitor to EMMS.''

Chesterfield had 154 buses, 320 employees and an engineering department at the time of the Stagecoach takeover. It made profits of #111,000 on turnover of #7.6m in the year to March 1995.

Stagecoach has had repeated run-ins with the Government competition authorities over its aggressive expansion strategy which has helped it to become the UK's largest bus company.

Last week Stagecoach sold its 20% stake in the South Yorkshire bus company Mainline Partnership to its Aberdeen-based rival FirstBus, after the Government ordered it to dispose of the holding.

Stagecoach is now branching out into rail transport. It has already won the franchise for South West Trains and is bidding for others as they come up for privatisation.