The transfer will mean that for the first time the Mayor of London will take control of a major part of the capital’s rail network.

As part of his July review Alistair Darling, the Transport Secretary, said that regional governments, including the London authority, should have a greater say in planning and providing rail transport. The rail industry has resisted because of suspicions of vested interests among regional politicians.

Insiders at Network Rail, the signalling and track operator, say that ceding more control to the mayor will cause disruption elsewhere on the network. “Railways are a sequential process. You can’t touch something at one end without creating a knock-on effect somewhere else,” one industry source said.

The Association of Train Operating Companies is also sceptical.

As a result of the transfer Transport for London (TfL), the Mayor’s transport authority, will be responsible for the £850 million conversion of London Underground’s East London Line to a National Rail network line running from Crystal Palace to Dalston by 2010.

The transfer will be announced today, when the mayor is expected to announce further potential extensions to the Docklands Light Railway.

The project handover follows a deal between TfL and the Government in July, which secured a guaranteed £3 billion funding for the East London Line and other transport projects to help the capital’s bid to host the 2012 Olympic Games. TfL will also be able to borrow another £3 billion.

The East London Line extension is the largest project to be carried out by TfL.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax