TAXI drivers trying to salvage their livelihoods were dealt a blow at their meeting with Rushmoor Council on Monday.

Representative for the Taxi Trade Board (TTB) Terry Dee put forward the drivers' suggestion that, because public demand for taxis was so low, the council should put a temporary restriction on issuing new licenses.

But despite a petition signed by 124 cabbies, the council's licensing and general purposes committee turned down the request over fears of legal repercussions.

Roger Watkins, a taxi driver in Rushmoor for 18 years, said: "Today is the result of a year's work and it has just been blown out of the water.

"All we wanted is some breathing space, some time for this trade to recover.

"The real snub is being gone against by fellow taxi driver in Waveley, Cllr Choudhary."

With 166 hackney carriages operating in Rushmoor, the borough has a higher ratio of taxis per head of population than any of the adjoining boroughs.

Mr Dee claimed a recent poll, carried out by the TTB over an 18 hour period, showed that on average 40% of taxis were standing idle at any one time.

He said: "A number of things are affecting our business — rises in fuel prices, local soldiers away in Iraq, the regeneration of Farnborough and Aldershot town centres and the economic climate generally."

Mr Watkins echoed these feelings and added the cost of public liability insurance had in some cases doubled, as cab drivers now had to have £5million of insurance cover rather than £2m previously.

"Also many drivers are tied into costly lease agreements, so they can't just switch to another job.

"There is a considerable financial burden on us these days."

He claims that, despite working far longer hours, his net income has fallen by 22% this year.

Cllr Mike Smith, who supported the taxi drivers, said: "We do not need extra cabs in this borough.

"If the public had some alternative form of transport, instead of this abysmal bus service, things would be different."

A report by the Office of Fair Trading on the regulation of taxis by local authorities, due to be published in August, became the major stumbling block for the taxi drivers' proposal as many councillors felt a decision should be made based its conclusions.

Although Cllr Keith Dibble suggested imposing a restriction on new licenses, with a review of the decision once the OFT report came out, Colin Rowlan, assistant head of environmental health, advised that the council may be at risk in the interim period of legal actions by applicants who were refused a licence.

He said: "While we have sympathy with the financial pressures on taxi drivers, there is a human rights issue and a legal cost issue.

"Each time the council's licence refusal is challenged it would have to conduct a needs survey to validate its decision, which would be expensive."

Cllr Diane Bedford suggested that rather than refusing licenses, the council tell applicants to wait until after the OFT report when the council could set out its policy for regulating licences.

However, the threat of legal action and the costs entailed proved to be the decisive factor as a majority vote of seven to four was cast in favour of maintaining the status quo.

Mr Watkins reacted to the decision saying: "We need help now not in three months' time.

"This is the worst state I have ever seen our business in.

"People are literally going out of business."