The Train Protection and Warning System (TPWS), which will cost operators £150m, will automatically stop trains if they pass a danger signal.

The BBC's Simon Montague reports: "The systems are to be fitted to all trains"

The system, to be fitted by the end of 2003, will "save lives and reduce accidents", said Deputy Prime Minister John Prescott.

The system has been tested on some Thameslink and Connex lines, and has been recommended by the Health and Safety Commission.

One incident that helped to spur the move was the rail disaster at Southall in west London in 1997, in which seven people died and 150 were injured.

In that case, a safety device was not switched on and the driver missed warning lights because he was said to have been packing his bag.

The rail company responsible, Great Western Trains, was recently fined a record £1.5m for putting passengers at risk.

Millions invested

TPWS will be fitted to all trains and at key junctions and other danger points on the tracks.

Deputy PM John Prescott: "I'm making a decision"

Mr Prescott said: "I am increasingly concerned over the number of incidents of trains going through red lights. Last year, for instance, 593 trains passed through red danger signals."

The government opted for the TPWS in preference to the much more expensive automatic train protection (ATP) system recommended after the Clapham rail disaster in 1988.

ATP was given trials on two lines but would have cost around £1bn to install nationwide and was dropped on cost grounds.

Railtrack has pointed out that TPWS will provide about 70% of the safety benefit of ATP at about 10-15% of the cost and can be introduced in a quarter to a third of the time.

It is thought that the fitting of TPWS would have prevented several recent train collisions including the 1994 crash at Cowden in Kent, in which five people died.

Mr Prescott said: "We have always regarded passenger safety as paramount. Railways are already the safest form of land transport, but we are striving to make them even safer."

Railtrack will be ordered to fit the train protection warning system throughout the UK's rail network.

Train owners will also have to modernise their rolling stock.

Jimmy Knapp, General Secretary of the largest rail union, the RMT, welcomed the announcement.