Earl Purple wrote:

In the USA, when a school bus is stopped they sometimes stop all the
traffic around it, a bit over-zealously at times.

School buses don't operate every 5 minutes...

One concept (for London buses), if you want to allow the bus to pull
out again, would be to have traffic lights on the back of the bus
itself, thus as the bus needs to pull out the light would go red for
traffic and the bus driver would have his own set of lights and he
would wait for green.

Traffic lights behind the bus stop could be provided, if it's a real
problem. These could turn red a specified amount of time (30 seconds?)
after activation of the induction loop in the stop, and turn green
again a specified amount of time (10 seconds?) after the induction loop
in the stop no longer detected the bus.

Traffic light arrangements like these are common in Germany and the
Netherlands, and work very well. They're also used to allow such
things as a bus turning left from a right-hand bus lane, or for buses
to overtake a line of stationary cars (the latter setups exist in the
UK in places - Peartree P&R in Oxford is one example).

Neil