Ministers and transport operators are due to meet next month to discuss how to introduce a nationwide system which will allow passengers to pay for journeys on trains and buses using smartcards or their mobile phones. The government eventually wants companies to comply with the Integrated Transport Smartcard Organisation which will become the industry standard.

Phones and cards containing chips could soon be used anywhere in the UK. Transport minister Norman Baker said he wanted passengers to be able to use one card to pay for a Bristol bus trip, a journey on the Metro in Newcastle and travel on the London Underground.

However, the challenge is getting a single system to work over longer journeys. Train companies including Virgin and the Heathrow Express may allow customers to buy and store tickets on their mobiles but other companies require customers to pick up a paper ticket from a staion.

The government hopes that interoperability will solve the problem. Companies would agree to use the same technology which would work out the route a customer needs to take and then divide the payment for the smart ticket between the operators on that route. The Rail Settlement Plan already does this for paper tickets.

Mr Baker said smart ticketing would not only make travelling around the country much simpler for passengers but would also keep costs down for the transport companies who would then be in a position to hand those savings on to their customers.