He told the House of Commons that spending on rail and roads would increase in real terms by 20% as part of the government's Comprehensive Spending Review.

Mr Brown said spending on transport would increase from £4.9bn this year to £6bn next year, to £7.4bn in 2002 and £9.1bn in 2003/4

He also announced that money to support rural transport initiatives would increase to £95m a year.

Mr Brown said the full details of the targets to improve buses and rail services would be announced by the Deputy Prime Minister on Thursday.