LANCASTER City Council has voted against plans for taxi deregulation after more than 30 drivers picketed outside a meeting at Morecambe Town Hall.

The council's environmental and public services policy committee finally chose to reject the plans at its meeting on Wednesday.

Instead, it will conduct a survey to assess the demand for additional hackney licences and protect itself from possible legal action.

Councillors were shown more than 20 letters and complaint forms from angry Hackney drivers.

They feared that their licences, some of which have changed hands for over £25,000, would become worthless and their ability to make a living severely impaired.

However, the council's legal department warned that it faced possible legal action from anyone applying for a licence, unless they could prove there was no 'significant unmet demand' for cabs.

The council has already received an application for a new licence from one private hire driver.

The survey, to be conducted by an independent, private, company, is expected to cost around £10,000, and will be paid for through a one-off hackney licence price increase.

Councillors are also hoping to set up new taxi ranks in a bid to quickly clear city centre trouble spots.

The council's licensing sub-committee had infuriated drivers by recommending that taxis be deregulated at a meeting two weeks ago.