Transport minister Derek Mackay has claimed that wholesale re-regulation of the bus market would 'create a degree of chaos', adding that Scottish councils 'don't have the capacity' to take on franchising powers.
However he did send out a stark warning that if bus operators did not perform he would legislate.
'It's not a preferred option but we could look at it again, although I would rather look at a partnership approach than using a big stick,' he said.
He went on to dismiss the debate as 'academic' and said 'rather than tell the bus industry we can run services better than them, I would rather get on with improvements'.
His comments follow a heated debate in England over the future of bus devolution, after a recent controversial ruling by a traffic commissioner suggested councils should pay compensation to operators in the event of taking on franchising powers.
The commissioner's opinion, which does not carry the force of a court's or set a legal precedent, provides ammunition to bus operators which are heavily resistant to moves to put the national market on the same footing as London.
Mr Mackay, a former local government minister, said councils were 'not in a place' to take on the same responsibilities as Transport for London, which sets routes and fares through the mayor's office.
He added that regulation would 'stop investment' from bus companies and suggested that his assurances to the industry had helped give them the confidence to put in more cash.