No lawmakers voted against the motion, sponsored by the Democratic Alliance for the Betterment of Hong Kong's Wong Kwok-hing. But Liberal Party and Democratic Party legislators abstained, calling for the matter to be dealt with by arbitration.

The company wants to raise tolls on the tunnel joining East Kowloon and Sha Tin by amounts ranging from 6 per cent to 30 per cent. The toll for a private car would rise from $10 to $12, and for a double-decker bus from $20 to $26.

Supporters of the motion said the increase was not needed because of the operator's improving finances.

Panel chairman Lau Kong-wah said: 'I don't see an urgent need for the company to increase its tolls. A delay would not have a big impact on its financial status.

'If the government approved this application, I think it would send a very bad message, encouraging a trend to increase prices on everything this year.'

The tunnel operator started posting profits in its 10th year of operation in 2000, but company executives argued that profits had fallen short of projections. It made $97.5 million in profits in 2003-04, well short of a projected $370.5 million.

The company blamed its shortfalls on the relocation of the airport from Kai Tak to Chek Lap Kok, prolonged economic difficulties in recent years, and a shift of industrial and manufacturing activities from Hong Kong to the mainland.

Legislator Patrick Lau Sau-shing asked company executives whether they had been too optimistic in their projections previously and were now too pessimistic about the company's prospects.

'I believe we are not overly pessimistic,' replied general manager George Lee. 'I think the projections are quite realistic.'

The government last granted the tunnel company a toll increase in 1999, when it was still suffering losses and had problems repaying its bank loans. There were two other toll increases previously.

The company has made four more toll-increase applications since 2000. The first three requests did not reach lawmakers because the company withdrew the applications under advice from the Environment, Transport and Works Bureau, which cited a poor economy.

Annie Choi Suk-han, the bureau's deputy secretary, said the administration had given similar advice about the latest application but it was not accepted.

She added the bureau did not have a position on the application.