"The zonal fares are another step in rolling out Oyster pay-as-you-go across national rail in London over the next few years," Rail Minister Tom Harris said in a statement.

Passengers already using prepaid Oyster cards on London's buses or Underground network, known as the Tube, pay less for single fares than cash customers.

The DfT said London train operators' franchise agreements had been changed and that those operators will not make a net gain from the change in fares.

In May, Transport for London, which runs the Tube, agreed to install Oyster card validation equipment in all national rail stations in London zones 1-6.

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97,000 rail fare tariffs cut to 21

The Guardian: October 20, 2006
Dan Milmo

The government took another step towards making the London commute a less stressful experience yesterday by slashing the number of fare combinations in the capital from nearly 100,000 to 21.

Business leaders warned Gordon Brown this week that London's congested transport system was undermining the city's attraction as a financial centre, with confusion over myriad ticketing schemes a major gripe among commuters. From January, nine train operators running services into London must adopt the Underground's zone-based tariff. The move reduces the number of fare combinations from 97,300 to 21 and encompasses the 330 rail stations within zones one to six.

Tom Harris, the rail minister, said the tariff changes brought "seamless travel" closer. "The new system is simple and sensible. It will make train fares in different parts of London consistent," he said.

The government also gave planning permission this week for a £3.5bn overhaul of the crowded Thameslink route.

Despite the move to bring train fares in line with the tube, rail passengers are still years away from being able to use Oyster cards on both networks. South Western, London's busiest rail franchise, is the first service to adopt Oyster cards but travellers must wait until 2009 before they can use the pay-as-you go ticketing system.

A smartcard system - a travel credit card that can be used on all forms of transport - is also being developed by the Department for Transport and will be introduced on three railway franchises in the Midlands.