A bus service linking thousands of people in North Yate and Iron Acton with Bristol has begun a new lease of life after being saved with taxpayers' money.

Yesterday was the first day of the new X27 service between Yate and Bristol, which is now subsidised by South Gloucestershire Council and run by bus operator First.

Residents had faced being stranded from public transport after First announced it was withdrawing the commercially run X27. First said the service was no longer viable, with income not even matching operating costs.

But South Gloucestershire Council agreed to subsidise the service.

Councillors said they would review the trial at the end of six months to decide its future, although a decision on a long-term solution could be complicated by Bristol City Council plans to withdraw its funding of evening, Sunday and bank holiday journeys on two services that run from Bristol to Downend and Staple Hill.

Brian Allinson, South Gloucestershire's cabinet member for transport, said: "We have identified that this route was vital for people in Yate and along the route.

"If they lost it, it would be a disaster for them.

"It is important for us to subsidise it but the sums needed are quite high. We have said we will subsidise the service initially for six months to try and get the number of people using it up, so that it comes back into commercial viability. We can't just subsidise it ad infinitum – something else would suffer if we did. We need more people to use the service and support it."

If the X27 had been lost, it would have removed a bus service from thousands of householders in Yate and Iron Acton.

Residents and passengers reacted angrily to the announcement that they were effectively to be denied any daytime bus services where they lived.

The service had been set to go on May 9, but a new timetable was launched yesterday.

The replacement service has kept the X27 name and follows the existing route through North Yate, Iron Acton, Winterbourne and Hambrook to Bristol.

But there are some changes to the route – instead of terminating at the Bristol bus station, it will run into the heart of Bristol with stops at Anchor Road, near Millennium Square, Bond Street (for Cabot Circus), The Haymarket and St Augustine's Parade.

That should help those passengers travelling to places in the College Green and Harbourside areas.

In Yate the service will no longer operate a loop through South Yate as bus services 342 and X42 provide alternatives, which also enable a faster journey to Bristol.

Councillors are trying to encourage people to use the buses more and say that with car parking charges at Cabot Circus setting you back £8 for four hours, they can save money.

A return bus ticket during the day between Bristol and Yate costs £6.40.