TRANSPORT ministers will this week give the go-ahead to the first phase of the long-delayed Thameslink 2000 project, a scheme that should boost rail capacity in London in time for the 2012 Olympics.

But in statements on rail policy expected on Tuesday, ministers may also spark controversy by proposing the deregulation of “saver” fares, leading to more expensive journeys for millions of rail passengers.

The first of the two statements will set out spending priorities up to 2014. The High Level Output Statement is likely to include Thameslink 2000, some 1,300 new carriages, the redevelopment of Birmingham New Street and Reading stations, and spending on signalling systems to bring them up to the latest European standards.

It is also likely to give guidance on the amount of funding that will be provided to Network Rail to run the system over the period.

The second statement, a 30-year vision for the network, is expected to dash hopes of a commitment to a new north-south high-speed line. Ministers are likely to say the plan needs more study to evaluate the benefits.

A Department for Transport source said: “If there were to be such a thing it would need to prove its worth to ministers both in cost and environ-mental terms. It would need to make a strong argument.”

Nor is there expected to be any commitment to Crossrail, the east-west London route, with no announcement expected before the comprehensive spending review in October.

Rail industry sources said on Friday that ministers were considering whether to proceed with a plan to deregulate saver fares – cheap tickets bought well in advance of travel. On most routes, increases in saver fares are not allowed to be greater than inflation plus 1%.

Deregulation would mean faster price increases. Rail companies are raising unregulated fares at about inflation plus 3% or more.

One train company boss said: “If they go ahead with it, it will create a major row, particularly as rail passengers are already being hit with big increases on other fares. It would be a big step, and a political hot potato.”

The go-ahead for the Thameslink 2000 project will – as its name suggests – bring to an end years of wrangling over its future. The scheme, first mooted before the privatisation of British Rail, will bring a big increase in capacity on the Thameslink route, which runs from north to south through the capital, linking Bedford and Brighton. Longer trains will run more often, with peak frequency rising from eight trains an hour to 24.

But only the northern half of the project will be given the go-ahead, because it can be completed in time for the Olympics. The decision will also avoid redevelopment around Borough market and Southwark cathedral.

Thameslink 2000 has a key role to play in the Olympic transport plan because it calls at St Pancras, from which high-speed shuttles will run to the games village at Stratford.

Plans for 1,000 new carriages have already been announced. The additional 300 included in this week’s statement are understood to come largely from the extra rolling stock needed for the Thameslink expansion.

The redevelopment of Birmingham and Reading stations will address two bottlenecks on the network. Reading will receive an extra platform, while Birmingham will be remodelled.

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