The backlash against cash machines that charge consumers for withdrawing money is weakening, a leading operator of ATMs claimed yesterday.

Moneybox, which operates 2,400 cash dispensers in pubs and other retail locations in the UK, said the number of transactions showed signs of recovery in April compared with levels seen in previous months.

It comes after the group became a casualty of media criticism of the practice of charging fees for cash withdrawals at ATMs, which bosses described as "unprecedented".

Research by the Nationwide Building Society in September last year found that one-third of cash machines in the UK charged for completing a transaction, with costs averaging £1.50.

That means consumers withdrawing £50 per week in five £10 withdrawals would pay over £30 a month in ATM fees.

Among the demands of campaigners were a cap on the level of charges and a code of practice, including prominent and clear warnings on feecharging dispensers --particularly those that have stopped being free.

The Treasury Select Committee earlier this year held an inquiry into fee-charging ATMs, looking at issues such as the impact they might be having on low-income communities and the transparency of charges.

This was because the number of fee- charging machines has grown from none in 1999 to almost 20,000 today - equating to 40 per cent of the UK's cash machine network.

HBOS - the banking group that owns Halifax and Bank of Scotland - last year sold 816 of its ATMs to Cardpoint for £50 million.

Peter McNamara, executive chairman of Moneybox, has defended the practice on the grounds that consumers were paying a fee for the convenience of withdrawing money and could always wait to use a free machine instead.

Trading has suffered from the storm of criticism and the need to upgrade dispensers to accept "chip and pin" cards, but he said that transactions should improve when the issue falls out of the spotlight.

Details emerged as Moneybox continues to consider takeover proposals from unnamed suitors which could value the company at more than £76 million. The interest comes a year after the company floated on the Alternative Investment Market.

Shares in Moneybox closed last night up 1/2p to 38p.