Chinese to run major parts of London rail and Tube network

It is to help operate Mayor Ken Livingstone's London Overground system, which will join together the North London rail line and the East London Tube line.

Hong Kong-based MTR and British firm Laing will take control of the North London line, currently called Silverlink Metro, in November.

MTR Laing will run the extended East London line, which will shut for a £1billion upgrade in December, when it reopens in 2010.

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The move will create a new addition to the Tube map, which the Mayor hailed as a "new rail artery" with "far-reaching improvements".

Mr Livingstone said: "By joining together the North and East London railways ahead of the 2012 Games we will create a new rail artery around the city, serving 20 London boroughs."

The plan will see a total of £1.4 billion spent on new trains and refurbished stations. All stations on the lines will become fully integrated into the Oyster system. Mr Livingstone said: "London Overground services will create 400 more jobs over the next three years and all those currently employed on the East London line will be offered new roles with London Underground.

"This contract paves the way for radical revitalisation of London's rail services, which have suffered from years of neglect and under-investment.

"It will provide passengers with the levels of staffing, safety and security and customer service they deserve."

Mr Livingstone maintains that London Overground is not a franchise but a "concession" and the set-up is different from those governing other parts of the mainline railways.

The North London Railway includes the North London line (Richmond to Stratford) the Euston to Watford Junction local line; the West London line (Willesden Junction to Clapham Junction via Kensington Olympia) and the Gospel Oak to Barking line.

Under the plans, 11 mainline stations will come under London Underground control.

They include Queen's Park to Harrow & Wealdstone on the Bakerloo line (excluding Willesden Junction) and Kew Gardens and Gunnersbury on the District line.

Also included are current Silverlink platforms at Blackhorse Road, Highbury & Islington and West Brompton stations.

Brian Cooke, the chairman of London TravelWatch, said: "This is good news for London. Laing has a very good record in running the Chiltern line.

"MTR operates one of the best metros in the world. Hopefully they will both bring these skills to London's rail concession."

However, the move was greeted with fury by the RMT, largest of the rail unions, which condemned the switch of the East London line from Tube to mainline operation as "privatisation". It pledged to fight the take-over "all the way" including strike action.

A Transport for London spokesman insisted: "This is not renationalisation nor privatisation. It is a completely new way of running the railway.

"The franchise has been awarded by the public, it will be controlled by the public and it will be run for the public."

The highly efficient MTR has been desperate to gain a foothold in the running of Europe's rail networks and particularly the British market.

It failed on previous bids for Southeastern, South West Trains and GNER franchises.

Metro services in Hong Kong have a 99 per cent punctuality record. Built 27 years ago, the system was originally run in part by British engineers, many with experience of British Rail and London Underground.