Train travel has expanded steadily since the 1990s
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The UK public made one billion train journeys in 2003 - the highest number for 40 years, figures indicate.
People are also travelling further than ever before. About 40bn passenger kilometres were recorded in 2003 - the highest figure since 1947.
The Association of Train Operating Companies said the figures pointed to a "renaissance" on Britain's railways.
Transport minister Tony McNulty MP said the figures were "remarkable", but more needed to be done.
Atoc's figures show that passenger numbers have been rising steadily since the 1990s.
Since 1996, there has been a 30% rise in passenger numbers, which equates to 240 million extra journeys.
Atoc says train companies are now providing a record number of services, with 18,805 trains running every weekday.
But recent figures show one in five trains are still running late, many trains are seriously overcrowded and fares are rising above inflation.
Overall performance has still not returned to the levels which existed before the Hatfield crash in 2000.
Fare rises
Mr McNulty is handing out a year's free rail travel to some passengers at London's Liverpool Street station at 1100 GMT on Tuesday to mark the one billion landmark.
He said: "Today represents a remarkable achievement of which the rail industry can be proud.
"The magic billion figure has been reached and the railway is now carrying more passengers than at any time since 1961.
"However there is still much work to be done.
"The government will continue to invest unprecedented levels of funding to ensure passengers get the modern reliable railway they deserve."
Atoc's director general, George Muir, praised the UK's train services.
"We have one of Europe's fastest growing railways with the youngest rolling stock fleet; big investment programmes to modernise the infrastructure and stations; vastly improved timetable and journey planning information; and the new multi-million pound Train Protection Warning System installed on all trains," he said.