First Great Western has been criticised by the Office of Rail Regulation for the age of its fleet.

The report also says more trains are running on time but passengers feel they aren't getting value for money.

The ORR long-distance rail services run by First Group have deteriorated and are well below average, it is claimed.

The regulator said it was working with interested parties on the western England problem and First Great Western and Network Rail are working on an improvement plan that should be in place next month.

First Great Western spokesman Adrian Ruck said the company was investing millions of pounds in updating its fleet of carriages and engines.

He said the company and Network Rail are working on a £750m upgrade of the 30-year-old track between London and Bristol and Cardiff.

"That will dramatically improve the reliability of the trains running on them," Mr Ruck said.

"We are investing millions on interiors and on brand new engines.

"They will be cleaner and greener."

Mr Ruck said all engines would be replaced within the next 18 months.

The regulator said 87 per cent of trains ran on time between April and June, compared to 84.3 per cent over the same period last year.

But that only 41 per cent of customers think rail travel is value for money "should be of concern"' to train companies.

The ORR said the complexity of fares and lack of knowledge of available discounts is another key area train operators needed to fix, as well as the misuse of level crossings by road users.

Like other sectors of the economy, train operators are facing significant increases in fuel and power costs' and the development of more fuel-efficient trains has become a higher priority'.

ORR chief executive Bill Emery said: "Our first review identifies many positive trends, and many challenges ahead. Overall passenger satisfaction stays at an all-time high.

"There is continuing steady progress in train punctuality, and stewardship of the network.

"However, Network Rail and its partners need to address the regional variations in performance.

"Maintaining and improving on this performance also requires the industry to meet the challenges of growing demand, and fluctuating energy costs."