"I am looking for the bus industry to provide better quality, better reliability, put more bums on seats and bring in more passengers and not more subsidies," the Secretary of State for the Environment, Transport and the Regions said.
He said that cuts in senior citizens' fares would make a "big difference to the quality of life" for elderly people on reduced incomes, and that he wanted to see all pensioners in England get a minimum half-price discount in exchange for buying an annual travel pass costing no more than pounds 5.
The measure is likely to add millions to local authorities' travel subsidy bills as Mr Prescott said nearly half of all English councils operated less generous schemes. Pensioners in London have free bus travel, but outside the capital the pattern varies, with some local authorities offering no concession at all.
The measure is unlikely to become reality for months as Mr Prescott needs to win legislative time. The Government said it would consult on all its proposals.
The Local Government Association said it disagreed with Mr Prescott's figures on the current level of pensioner subsidy. It said it was disappointed the Government had failed to give a legislative timetable.
Announcing the plans at a news conference on board an environmentally friendly bus in London, Mr Prescott said he wanted to end the deregulated "free for all" brought in by the Tories. He set out a package of measures to force bus companies to improve services and to bring in tougher powers to crack down on the failures.
He said he would hold a bus industry summit in the autumn, on similar lines to the rail summit held last month in response to appalling performance levels.
"Buses represent the best opportunity for leading a renaissance of public transport in this country. At the end of the day, it is what the passenger wants that matters," he said.
Other measures, most of which would need legislation, include:
Tougher powers for traffic commissioners, who currently license bus operators, to fine operators for services that fail the passenger;
New laws to allow councils to stipulate service standards, with failure enforced by traffic commissioners;
Forcing operators to notify commissioners of plans to alter the timetable 21 days in advance, to prevent companies launching "bus wars" by running services five minutes ahead of competitors;
A pilot project in Wales to enable passengers to get information on rail, bus, coach and metro services through a single telephone call or on the Internet;
Powers to force operators to offer tickets for use on trains.
Bernard Jenkin, the Conservative transport spokesman, said: "Once again it looks like all talk and no action. Another glossy brochure, another launch, but people's travelling lives are still a misery."
Matthew Taylor, the Liberal Democrat spokesman, said: "Waiting for government action on buses is like waiting for a bus in most areas. There is no sign of it turning up and the timetable is missing. Labour promised better buses last July. This consultation document repeats that promise nine months later, but still there is no legislation to put it into action."Reuse content