The Office of Fair Trading has called for local council controls of taxi numbers to be abolished, while retaining existing safeguards on charges, vehicle safety and driver quality.

Tony McNulty, transport minister, said: "Taxis and private hire vehicles are an important part of integrated transport and play a key role in local transport provision, particularly for those without cars.

"We will carefully consider the report's implications - not just for drivers and operators, but for local authorities, especially in the context of their local transport plans, and most importantly, for all taxi and private hire vehicle users as well.

"We shall of course be inviting the views of all stakeholders. I very much look forward to hearing their views on this report."

Forum Response: Consumers Association

Phil Evans, principal policy adviser at the Consumers' Association, said: "Taxis are an important service for all consumers and a focused and limited set of reforms will ensure that the public get the best of what currently happens, combined with greater provision and wider availability.

"A safe and easily accessible taxi service ranks highly in the everyday lives of many consumers. The OFT has recognised that the liberalisation of licensing must not compromise consumer safety and that by lifting entry restrictions this will help starve the illegal market, which depends on the shortage of licensed operators, of trade."

Forum Response: National Consumer Council

Ed Mayo, chief executive of the National Consumer Council, said: "You don't have to be a mastermind to see that limiting the number of taxis that can operate is bad news for consumers.

"Taxis offer a vital public transport service, especially for people who are disabled, on low incomes or elderly. These proposals are an important milestone with the potential to put more licensed cabs on the road - reducing waiting times and enhancing public safety.

"So we urge the Department of Transport to change the law and speed the day when no council in England and Wales can restrict the number of cabs licensed to run on its roads.

"But we want the government to go further than the OFT's recommendations and explore the case for an easy-to-use and effective redress system for taxi users, and for a social responsibility on taxi firms to provide services during certain hours and, where relevant, in specific outlying areas."