Transport providers have threatened to withdraw from the free travel scheme on the basis that it is not covering the cost of offering the service.

A Government working group is currently reviewing the future of the €77 million- a-year scheme, which benefits more than 780,000 people every year.

Internal documents show the Department of Social Protection is under increasing pressure from transport operators to increase funding and some firms have threatened to withdraw from the scheme.

Under the travel scheme, pass-holders can travel free on State-funded transport such as Irish Rail and Bus Éireann, as well as services offered by up to 90 private operators across the State.

Funding for free travel has been frozen at the same level for the past four years while the number of pass-holders has increased over the same period of time.

But Government sources say it is unlikely additional money for the scheme will be available for next year.

Whartons' Travel, which operates a bus service, has already pulled out of the scheme on its Cavan to Longford route, citing an increase in the number of people using free travel passes and inadequate State support.

It said the allowance from the Department worked out at just €57 a day on the route.

State transport providers have privately sought the reintroduction of peak-hour travel restrictions which, they argue, would allow them to raise additional revenue.

These restrictions were introduced in the 1960s and limited free travel on certain routes during morning and evening rush-hours. The last of these restrictions were removed in 2006.

The free travel scheme is available to all people living in the State aged 66 years or over, as well as carers and people with disabilities who are in receipt of certain social welfare payments.

In a statement, the Department of Social Protection said the review had not been finalised. Minister for Social Protection Joan Burton appreciated the "value" the scheme provided to the mainly older people who used it, the statement said. Among the issues being examined were eligibility, the extent of the service and the funding available, according to the terms of reference.

A senior Government source, however, said it was unlikely that additional money would be available next year.

“It is very difficult to see how the funding could be increased, given pressures elsewhere, but we would argue that we’ve shown our commitment by sustaining it through the worst of the economic crisis,” the source said.

Groups such as Age Action Ireland say any changes to the scheme will be "vehemently opposed" by older people.

The number of people eligible to use free travel has risen substantially over the past decade, up from just over 600,000 recipients in 2001 to more than more than 700,000 last year. When companion passes are taken into account, there are more than 1.1 million customers with free travel eligibility.

Other records released under the Freedom of Information show the Department was forced to withdraw a record number of free travel passes last year following a clampdown on fraud.

In all, inspectors cancelled a record 18,230 passes last year. Authorities also seized a further 1,500 fraudulent passes last year, almost twice the number seized in the previous year.