A popular £1 bus ticket offer from Brighton to London is to be expanded following demand from passengers.

Stagecoach will increase the number of inter-city services each day from two to five in both directions from June 28.

When it launched in March, Stagecoach's budget megabus service emulated the success of the no-frills airlines.

Stagecoach group chief executive Brian Souter said: "Megabus.com has sparked a huge demand for inter-city bus travel across the UK, including the thousands of passengers who have used our Brighton-London service.

"We think there is an even bigger market out there and have decided to expand our services so we can meet that demand.

"These new journeys will give passengers a wider range of departure times and even more chance of snapping up a bargain."

Megabus announced its cheapest ticket would be £1 each way, plus a 50p booking fee.

National Express retaliated by drastically dropping its return fare from Brighton to London from £9.50 to just £2 - sparking an Eighties-style "bus war".

At that time Stagecoach developed a reputation for squeezing competitors out of the newly-deregulated market using aggressive scheduling and cheap prices.

National Express believes its service has the measure of its rival. It says it carries more than 600 passengers a day on its 17 services between Brighton and London, enjoying 20 per cent growth since January 2004.

The company scored a propaganda coup when the megabus service from Brighton to London broke down on the M23 during the service's first weekend trip.

Passengers were shepherded by traffic police on to a National Express service.

A spokesman for National Express said: "What we say is you get more for your money because we offer toilets. Megabus only has double-deckers and they are slower - and there are not as many pick-up points."

In fact, megabus offers the shorter journey time by 20 minutes - at two hours and 15 minutes - and guarantees to sell the first third of seats at the reduced rate compared with 20 per cent on National Express buses.

It is unclear which company is winning the competition as neither could provide sales figures yesterday.

The head-to-head could soon become a three-way scrap with Stelios Haji-Ioannou, the founder of easyJet, recently announcing plans to provide short-distance minibus services around and into London.

Mr Haji-Ioannou said he was not worried by the presence of the megabus service in similar areas.

He said: "I think this is possibly a mistake because the buses are so big and will be difficult to fill.

"There is nothing more expensive than an empty bus."

Megabus says its research shows its London to Brighton line appeals to a wide audience including students, commuters, families and "silver surfers" - over-55s who use the internet.

So far it is this customer base which has reassured train operators neither coach line presents any real competition.

South Central says its passenger numbers have not been affected by megabus and National Express.

A spokesman said: "They are going for a different market. We are going for people who want to get there in an hour and want the experience of the ride whereas the bus companies are going for people who are cash-poor and want a cheaper ride. We will keep an eye on it. If you want to get to Brighton quickly for a day out at the beach I wouldn't take the bus."