North Yorkshire County Council's bid for £116 million from the high-profile Bus Back Better scheme was rejected in April when the government claimed the plans to upgrade buses and infrastructure across the county lacked "sufficient ambition".
And now there are warnings that bus services could be at risk of
Councillor Keane Duncan, executive member for transport at the county council, said in a report that services are already facing "significant pressures" ahead of the cuts which "presents a potential cliff-edge in terms of the future profitability of routes our residents rely upon".
He added a review was underway to identify the risks and "keep as many of our vital services running as possible".
At a recent full council meeting,Liberal Democrat councillor Chris Aldred said the loss of services was all too familiar following years of austerity cutbacks.
He said: "We have got this deregulated system where as soon as a service isn't making a profit in the eyes of the provider, it gets lost.
"In our urban communities of Harrogate and Knaresborough, we have suffered from this in recent years."
Councillor Aldred - who represents High Harrogate and Kingsley - also made a political dig at the Bus Back Better scheme as he urged the council to keep pushing for improvements, particularly in urban areas.
He said: "I would be worried - appalled even - if I was presenting a scheme for funding from a Conservative government to a Conservative council and the comeback was that the plan was unambitious.
"However, we are where we are and I note that we are assessing the support the council can provide at the moment.
"I would just plead that as well as looking at rural buses - which we all agree are a problem to provide regular and reliable services - we don't forget urban services as well."
The council's Bus Back Better bid included £23 million for new bus lanes, £74 million for other infrastructure changes and £14 million for support for services.
However, North Yorkshire was one of many areas across the country which did not receive any funding.
In total, just 34 of 79 areas which applied were successful.
The council previously said some of its plans could still go ahead without government support, including an expansion of its on-demand bus service, YorBus, which is being trialled in Ripon, Bedale and Masham.
The possibility of a Harrogate park and ride scheme is also still being assessed, although progress has been slow and questions remain about how this would be funded.
Meanwhile, there has been success in a separate council bid for £7.8 million to make Harrogate Bus Company's fleet all-electric with the delivery of 39 zero-emission buses
The project will cost almost £20 million in total, with more than £12 million being invested by the company's parent firm Transdev.
At last week's meeting, councillor Duncan repeated disappointment over the Bus Back Better bid, but added the council would not be deterred from applying for future funding.
He said: "Unfortunately our bid wasn't successful and we didn't receive the funding.
"That was an immense disappointment to the team that worked on the bid and we are trying to ascertain from government how we can ensure bids in the future are successful."
Councillor Duncan also said he was keen to see the YorBus scheme rolled out across other parts of North Yorkshire following the trial.
He said: "The feedback we have received has been very popular... but we do need more time to consider how we can roll out what I believe is an innovative scheme across other parts of the county."
By Jacob Webster, Local Democracy Reporter