Derek Brocklehurst, 38, refused to pay the £30 on the grounds that the sign was wrong.
The blue-circle sign is supposed to state that only buses, cyclists and black cabs can use the lane - but the word 'only' was missing.
Manchester council admitted there had been a mistake and later corrected the sign.
But Mr Brocklehurst's success could now open the floodgates for other drivers to challenge fines they have already paid after being caught using the lane, outside Victoria railway station.
And the council could be faced with a bill running into hundreds of thousands of pounds after it emerged that in the four month period since the sign was first erected on December 15, a staggering 10,185 notices of prosecution have been sent out.
Mr Brocklehurst is himself a private hire driver, but only hackney carriages are allowed to use the lane. He was given a ticket in early January and the sign was not corrected until mid-March.
He said he has already helped get twenty similar cases quashed, and is now urging anyone caught before the sign was corrected to write to Manchester council asking for a refund.
Mr Brocklehurst was able to argue against the bus-lane fine after delving into road sign law. "The regulations clearly state that along with the round blue circular sign indicating a bus, a cycle and a taxi there should also be an accompanying sign bearing the word `Only'.
"At Victoria there was just a circular sign, so I wrote to the council informing them of the fact. It was a technicality, but the sign was in fact illegal."
Challenge
Mr Brocklehurst, from Audenshaw, added: "I have helped a number of other drivers do the same thing, and have printed off a standard letter which is available to anyone else who got a notice of fine before the sign was changed, to challenge it.
"There must be hundreds and hundreds of drivers that have received penalty notices for driving on this bus lane, so potentially there could be literally thousands of pounds involved. The fine is £30 if paid within 14 days, but doubles to £60 and then £90 if it goes unpaid."
He said private hire drivers have long argued that they should be allowed to use bus lanes across the city, as black cab drivers are able to do.
Rachel Christie, head of environmental services at Manchester council, said: "We have investigated this matter and there was a technical error with the sign, which has now been rectified and we have cancelled Mr Brocklehurst's ticket.
"While warnings, additional signage and prominent adverts on the MEN Arena website have led to more motorists complying at this location, compliance has not been as high as in other bus lanes.
"In light of this we will be making further improvements to the signage to make it abundantly clear to the small percentage of motorists unfamiliar with this location where the bus lane begins and access for motorists ends."
The council says that when signs at Victoria first went up on December 15 2008, they were perfectly correct and legal.
At some point the secondary sign bearing the word 'Only' disappeared, but the authority is unable to say precisely when.
The council said the 10,185 notices of prosecution does not represent the actual number of drivers fined, as not all cases would have been proceeded with. Tweet

Comments
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What would happen if someone kept painting "only" out?
Good - we should use the law against them at every turn as they enjoy doing so against us.
They wrote the laws - so they at least should get it right every time!
Remember - ignorance of the law is no defence!
So he saw the sign that indicates buses, bikes and taxi's only then? So he has to pay the fine.
I hate these so called 'loop holes'. Pay the fine for being in the wrong, simple. If all the sign had gone, then I could understand, but the sign that says 'only' is just not really that important. You know what the rest of it means yet you ignored or missed it.
Al Capone of Atherton, Atherton
20/04/2009 at 08:14
That person would be caught on camera, arrested and fined????....But if you want to do it be my guest! :-)
Blue circular signs are used for mandatory instructions, there should be no need for and "only" sign. It's common knowledge that road is for buses and taxis only, he should've just paid the fine and learnt from his mistake.
Maybe someone nicked the 'only' sign, to weight it in for scrap to pay towards the sign! Mr Loophole. Sign or not, he was in the wrong, he knew what he was doing.
Although, I think the bus lane is fatally flawed. It's not like there is any alternative diversion route to avoid it. All you can do is a 3 point turn. Once you have gone so far, in a way most people will continue.
bus lanes are pointless anyway! a waste of good tarmac. if bus lanes are created they should be an extension on the existing road layout. not a conversion of an existing lane.
the real cause of congestion. man made by your local councils!
well done derek about time the law was used as it should be they are always saying the law is there to protct us well for once they were right
It is not a loophole. It is the law. The authorities have rules they have to abide by just like drivers do. And if they don't, then they cannot enforce their own rules. Nothing to do with a loophole.
It's common knowledge that road is for buses and taxis only, he should've just paid the fine and learnt from his mistake.
Me746, Tameside
Ha ha, common knowledge doesn't apply in the eyes of the law I'm afraid. Ridiculous statement...what about foreign drivers..it's not common knowledge for them is it!?
I was driving down Hyde Road yesterday and used the bus lane (as you are allowed on certain days and also at certain times) and I was the only one. There was a line of about twenty cars who all were in the other lane. One bloke pull over a bit so as to stop me going past him down the bus lane. At the lights he questioned my eyesight, called me a ****head and asked if I thought my car was actually a bus!
I told him to read the sign properly.
Anyway, the council should make clearer the signs that say you can use certain bus lanes in all hours apart from 7am -10am and 4pm - 7pm. You never know it might even speed up the traffic flow - oh forgeot, they don't want that.
I am annoyed that they have banned cars from using this road. It was a very good short cut from having to go round the arena and I don't see why they've done it, as it was never that busy.
Well done Derek, its a shame you can not fine the council for the inconvenience caused.
""private hire drivers have long argued that they should be allowed to use bus lanes""
And sound their horns outside pubs and after 11pm, park anywhere, block driveways and roads, double park...
Bus lanes are a joke though....empty most of the time and causing congestion in the rest of the road. Most people don't know most only apply at certain times - and the one our way has so many side roads joining it that the signs are rendered almost useless.
"It's common knowledge that road is for buses and taxis only, he should've just paid the fine and learnt from his mistake"
I'm sure you'd be the first to complain if there were wording errors in the paperwork. The council has a responsibility to make sure everything is spot on.
By your argument, he should have paid even if he just got a hand written post-it note through the post, because he 'deserved it'.
Road tax goes up, but the amount of road you can use keeps going down. These lanes are empty for about 97% of the time.
It was only last week the authorities admitted it has been policy to cause jams, so the Government will gain extra revenue from fuel sales. So, it's been 'to hell' with the pollution and environmental aspects.
How is that consistent with policies surrounding global warming/climate change or whatever it's called this week?
It is worth asking what exactly is a bus? Legally they don't have to have a ceratin number of seats to be called a bus. If the vehicle is used to transport peopel it can be called a bus. You can't use a bus lane hwoever if the sign says 'local bus' otherwise you can.
I don't believe for one minute that the 'Only' sign was ever there in the first place and has somehow disappeared.
I received a fixed penalty on the 8th Jan 2009 and I took a photograph of the signs at Victoria Station on the 10th Jan 2009 and the 'Only' sign was not there then.
I appealed my fixed penalty on other grounds and it was cancelled.
Now council officials don't cancel fixed penalties out of the goodness of their hearts do they.
Drew Peacock. If foreign drivers cannot understand the signs, they shouldn't be driving on our roads, it's as simple as that.
Common knowledge shouldn't come into it, signs are categorised as with most signs in everyday life, colour coded for Advisory, warning or mandatory, most people should be made aware of that when learning to drive, the symbol on the sign then simply shows what it is warning / advising on or what must be adhered to.
I posted before I had finished with my rant...
If Manchester Council has a green initiative why are they forcing drivers to take a longer routes out of the city.
Victoria Station is a prime example...Drop off there and you have to exit at the other end at Corporation St thus forcing you to go round in a full circle if you need to get back to Deansgate.....more exhaust fumes, more fuel it doe's not make sense..mind you since when has a council had any sense, Common or otherwise.
another muppet who has got away with the law. Bus lanes are there to try and improve bus services.
Roadrunner: Don't drive to town use public transport and read the paper on the way instead of chatting on yoyr phone while driving
Audenshaw Bob: a bus is one that is on a staged route ie the 44 or 192 not coaches from out of town
I got caught up in this!!!! I was extremely angry the sign was not claer at all considering it was just put and drivers were not aware this is a bus lane previously.
Does anyone know who i need to write to claim my refund? and where i can get a copy of the letter template?
Fk
Anyone know where I can access the standard letter to ask for a refund?!