Three Oxfordshire taxi firms have closed and others are under threat after the cost of insurance rose by up to 120 per cent in a year.

County Cars and Maycock Taxis, both in Kidlington, and Airport Express, in Oxford, all ceased trading because of higher insurance costs. Other companies plan to pass on the cost of insurance rises to their passengers.

County Cars said the cost of insurance cover had risen by 120 per cent, while other firms were hit by rises of 35 to 60 per cent.

Tony King, taxi licensing officer for Cherwell District Council, said: "This year insurance for private and public hire operations has increased considerably, by about 35 per cent and, in some cases, by as much as 60 per cent.

"I'm sure that businesses are finding it more and more difficult and these increases will have to be put into fares.

"I've had increasing complaints from customers about high fares, but operators have to pay their overheads or go out of business."

Tony Green, chairman of the Oxford and District Private Hire Association, said taxi drivers -- who pay for their own insurance in the city -- would have to raise prices or go out of business.

He said: "This time last year it cost £1,800 to insure a car but I've just had a call from a driver saying his new premium is £4,400 -- it's astronomical!

"A lot of insurance companies are packing in insuring taxis and the others are pushing the price up. We've got nowhere else to go.

"We already pay through the nose for plates -- £350 in Oxford -- and petrol isn't cheap either."

Malcolm Jackson, owner of County Cars, said: "Our insurance costs went up by about 120 per cent. It is ludicrous, and that was one of the main reasons why we went out of business."

Insurers said premiums have gone up in response to rising claims, but they are unlikely to continue rising at the same rate.

Nigel Withyman, of the Lloyds Motors Underwriters Association, said: "The coach and taxi insurance business has been remarkably unprofitable for a long time. Anyone who runs a private car would have noticed the same thing.

"This is a correction because claims costs have been rising, while premiums have remained stable, but I wouldn't expect the rate of increase to continue."

The problems suffered by taxi firms could undermine the Oxford Transport Strategy.

Mrs Samantha Tharme, a transport planner, said: "The council considers that taxis play an important part of an integrated transport system and a key link with other forms of transport in encouraging drivers to leave their cars at home."