The Minister of State for the Environment last night formally announced the end of restrictions on the number of new taxi licences which local authorities can grant. Mr Robert Molloy also introduced new regulations for the issuing of licences.

A continuation of the current inadequate supply of taxis is "not supportable", he said. However, as a conciliatory gesture to current licence-holders, Mr Molloy said the Minister for Finance was considering a special tax-relief provision over a number of years, "for any actual capital loss incurred by existing taxi-licence holders by reference to the actual sum paid for the licence". This provision will be in the 2001 Finance Bill.

The regulations introduced include: a requirement that taxi licensees will have to have a vehicle test certificate, a certificate of suitability, and appropriate motor insurance; a £5,000 licence fee for the granting of a licence with a £100 fee for a wheelchair-accessible licence and £200 for a hackney or limousine licence; all taximeters will have to be able to issue automatic taxi receipts from January 2002; validation of taxi-sharing from specially designated taxi stands.

Mr Molloy made the announcement during a Fine Gael private member's motion of public transport at which the Opposition condemned the Govern ment's transport policies.

Labour's public enterprise spokesman, Mr Emmet Stagg, while welcoming the availability of more taxi plates, said there were losers in the process. "Many taxi-drivers have invested huge sums in gaining access to this industry. They will feel themselves as the losers this evening. And make no bones about it, responsibility for their fate lies in the hands of Fianna Fail and the Taoiseach in particular."

He condemned the past relationship between Fianna Fail and elements in the taxi industry as "one of the most sordid in recent years. The extent of support for Fianna Fail through advertising on taxis at the last election is in itself a case of banning corporate or business donations to politicians. Never has a link between donation and delivery been so clear. For Fianna Fail, however, the link with taxi drivers is no longer expedient."

Mr Molloy said he acknowledged "that the adjustments which have now been necessitated will be difficult for many existing taxi-operators. I am confident, however, that with appropriate organisation and marketing these operators and others can achieve good returns given the present urgent and buoyant demand for enhanced taxi services."

Certain recent new holders of wheelchair-accessible taxi licences would have paid much higher licence fees to local authorities than the new fees. He intended to consult local authorities and taxi representative bodies with a view to developing an administrative scheme to address this situation.

The Government's plan in January for 3,100 new Dublin taxi licences was followed by regulations which were subsequently struck down in the High Court. "In that judgment, the High Court made it clear that limitation of taxi licences in the interests of existing licence-holders cannot be contemplated."

Explaining the new measures, the Minister said the new regulations "do not place or authorise any restriction on the numbers of new tax licences which shall be granted by local licensing authorities. These changes will apply not just to Dublin, but also to the taxi services operating in all other taximeter areas."

He said the present inadequate supply of taxis in Dublin "risks harming the capital's reputation in the eyes of international business people and other visitors. It would also remain a source of frustration to residents of the city."

He believed this initiative would benefit both the public and the Dublin taxi industry. "The Dublin taxi market, like many other sectors of Dublin's economy, is capable of significant and sustained growth. As such, it can well support a larger and service-driven industry to the mutual benefit of all concerned."

Mr Molloy said that as an incentive for the provision of wheelchair-accessible taxis, the regulations would fix the fee for such taxis at £100 compared to £5,000 for other taxi licences.

The Government had been berated over its Quality Bus Corridor programme, for which Mr Molloy has responsibility. Defending the slow progress - four such corridors have been introduced while 11 were planned - Mr Molloy said the delay was due to a number of factors including opposition by some traders, problems with residential parking, protracted public consultations and the availability of contractors and the difficulties of working in a live traffic environment.

Mr Stagg, who called for a referendum on the Dublin Transport Office proposals, said the future of Dublin transport over the next five years was "buses and bus lanes". If public transport was to be a serious option for Dublin it would require considerable investment and "a clear indication from Government, particularly in terms of a pricing mechanism, that it intends to prioritise public over private transport."