TRANSPORT minister Derek Mackay has said he is "open-minded" about proposals to re-regulate Scotland's bus industry.

Mr Mackay told a transport conference in Edinburgh that bus passengers in some areas of the country had to put up with a "patchy service", and hinted that he might be willing to consider the proposals put forward by former Labour leader Iain Gray to shake up the industry.

Mr Gray is spearheading a Private Members' Bill, due to go before the Scottish Parliament this summer, calling for more regulation.

Speaking at the second annual Scottish Transport Conference, Mr Mackay said: "It's patchy - there are some excellent services, and some less so.

"I have some concerns around the affordability of some services, the patchy service and the decisions made by some bus operators with regards to services.

"There has to be better engagement. For that reason, I will continue to remain neutral on the Private Members' Bill going through parliament at the moment. Let's see what it throws up. I remain open-minded."

Mr Mackay's stance will prove highly controversial with bus operators, who are bitterly opposed to any moves to reverse privatisation.

Iain Gray, MSP for East Lothian, tabled his proposals after a number of bus services were cut in his own constituency.

His Bill proposes handing regional transport authorities greater power over how bus services are run, including a new franchising power which would force operators to bid for "bundles" of contracts combining both profitable and non-profitable routes.

The Bill also proposes a new power for the Traffic Commissioner to penalise operators where franchise agreements are broken.

However, the Confederation of Passenger Transport Scotland, which represents bus operators, said regulation would push up fares.

A spokesman for CPT Scotland said: "It is entirely understandable that the Minister does not want to pre-judge Mr Gray's final bill before it is published. However, Mr Gray's draft proposals were uncosted and had the potential to lead to increased bus fares and higher bills for taxpayers across Scotland who would be liable for the financial risk of running bus services."

He added: "It is clear that the best way to further improve bus services for passengers in Scotland is by closer partnership working between operators and local authorities, and not by unnecessary regulatory change which would come at huge expense to the public purse. Hopefully, Mr Gray's final bill will acknowledge this."

It comes amid increasing talk of bus regulation across the UK, with Labour's election manifesto outlining plans to regulate the bus industry and the Coalition last year promising to hand Manchester "London-style" control over its bus industry.