Boris Johnson, the Mayor of London, has scrapped a controversial tie-up with Venezuela, in a move that looks like spelling the end of half-price bus and tram travel for some of the capital’s least well-off.

The Mayor’s predecessor, Ken Livingstone, signed a deal with the South American nation’s state-owned oil company last year to cut 20 per cent of the fuel bill for buses in return for transport advice. The savings were used to offer discount fares to about 250,000 people on income support.

In a statement yesterday, Mr Johnson confirmed that the deal with Venezuela’s President Hugo Chavez would not be renewed when it concluded in August and said that work had already begun to close down an office in Caracas that costs £67,000 a year to run.