Companies interested in running a large chunk of London's railway system will now have to submit their bids to the Mayor of London, Ken Livingstone.
Ministers switched responsibility yesterday for the 60-mile Silverlink Metro network from the Department for Transport to Transport for London (TfL). The present operator, National Express, said that it had already been working with TfL and would be submitting a bid for the new franchise.
The move is part of the Government's strategy of giving the mayor control over rail services within the Greater London Authority (GLA) area and is thought to presage similar arrangements for other lines in and around the capital.
The Silverlink Metro network links the extremities of the capital between Richmond and north Woolwich, Gospel Oak and Barking, and Clapham Junction and Willesden Junction. The company also runs local services between Euston and Watford.
While the Silverlink Metro network was chosen because it is the one national rail service that operates almost entirely within the GLA boundary, discussions are under way between TfL and neighbouring local authorities over the possibility of running other lines.
A spokesman for the mayor said yesterday that the successful bidder for the new franchise, which is due to start in November next year, would be expected to run more services and employ more station staff.
The Transport Secretary, Alistair Darling, said the Metro routes would provide a crucial link to the 2012 Olympics. He said the Government, TfL and the London 2012 organisation were developing plans to enhance the capacity of the line both in preparation for the Games and also to leave a "lasting legacy".
The current Silverlink franchise consists of Silverlink Metro services and Silverlink County services and expires in October 2006. Silverlink County services will form part of the new West Midlands franchise.
Mr Livingstone said that from 2007 TfL could begin to revitalise London's "overground" rail services just as it has done with buses and is doing on the London Underground.
"In addition to improved services, my first priority will be station safety and security, which means putting staff back into the stations, which is where the public want to see them," he said.
Roger Evans, the Conservative chairman of the London Assembly transport committee, welcomed the developments but said it was unfortunate that Londoners would have to wait until 2007 before any work was started.
Brian Cooke, the chairman of passenger watchdog body London TravelWatch, welcomed the fact that Oyster pay-as-you-go cards would be accepted on the overground services - "something we want other train companies to emulate as soon as possible".