Of "particular urgency" Mr Blair also wants the Department for Transport to contribute "fully" to future energy policy.

In a letter dated 10 May to Douglas Alexander, setting out the main objectives for his new Transport Secretary, Mr Blair says: "We need to develop a clear-long term strategy for the Future of Rail by summer 2007, including an assessment of future investment levels, how we can continue to improve rail performance, and options for increasing capacity in the network."

And the Prime Minister adds: "We need to ensure that we have identified a clear way forward on Crossrail, consistent with sensible handling of the Bill currently before Parliament."

In his letter, Tony Blair says he is asking all Secretaries of State to identify the key challenges for their Departments and how they propose to deliver against these.

"By the end of June I would welcome your preliminary assessment of key challenges for your Department, including the key milestones and risks in each area, and the main actions you propose to meet these challenges.

"As a first step, I would be grateful if you come back to me by the end of May on how you have allocated responsibility for key transport issues and objectives among your Ministerial team."

"EFFICIENT AND RELIABLE TRANSPORT SYSTEM IS ESSENTIAL"

The Prime Minister's letter states: "An efficient and reliable transport system is essential for our economy and future competitiveness. This is why we have committed to record levels of investment in transport by 2015 in DfT's long-term spending guideline. The results of this investment are evident.

"More people are travelling by rail than at any time in the past 40 years, while performance is back at pre-Hatfield levels and continues to improve. Thirty five major road schemes have been completed since 2001 and we have seen progress in bus travel in recent years.

"We need to continue to build on this record. But we also need to demonstrate that we are addressing the fundamental challenges ahead for transport.

"As the population grows, and we become more wealthy, our demand for travel is increasing. Many parts of our road and rail network are already under severe pressure especially at peak times. While we have set out clear plans for future investment, constraints on public expenditure mean we cannot simply build our way out of these problems.

"And the benefits transport can deliver must also be measured against its impact on the environment; in particular transport will be critical to our long-term goal of reducing carbon emissions.

"The key over-arching challenge for you therefore is to ensure that we have a clear policy for the future which sets out how our long-term transport strategy supports economic growth and development, meets the public need for transport and is consistent with our environmental goals.

"In developing this you will want to build on the work Rod Eddington is doing on priorities for investment in transport infrastructure. You will also need to work closely in particular with David Miliband (DEFRA), Alistair Darling (DTI), and Ruth Kelly (Communities & Local Government) to ensure that our transport strategy is consistent with government policies in relation to the environment, energy and housing. Of particular urgency will be ensuring that DfT has contributed fully to the Energy Review, which reports in June."

The Prime Minister also warns there will be less cash available: "Your future plans will of course need to be set against the background of lower growth in funding than in recent years. This means the Zero Based and Efficiency Reviews currently underway, combined with Departmental Capability Reviews, will be a critical input and I would like you to give these your personal attention to ensure that the Department's spending is effective and fit for purpose as we move forward."