Test on the new system will start on the Cambrian line in 2007

The Cambrian Coast Line from Shrewsbury to Aberystwyth and Pwllheli will be the testing ground for the system, which will enable trains to travel safely closer together at high speed.

It is believed the system will save, on average, two lives a year in Britain and help relieve overcrowding on some trains.

If the trials are successful the European Rail Traffic Management System (ERTMS) will allow tilting trains to travel along the West Coast main line from London to Glasgow at 140mph.

The 135-mile long Cambrian line was selected to try out the system a year ago with last-minute testing of the equipment due to be carried out during 2006, with the new system being introduced for trains a year later.

The Cambrian trial is on target to start in 2007 with its completion planned for 2008 Richard Bowker, SRA chairman

The Strategic Rail Authority's chairman Richard Bowker said: "The Cambrian trial is on target to start in 2007 with its completion planned for 2008.

"The tremendous progress made in the last 12 months towards this objective is the result of close co-operation under the leadership of the SRA including Network Rail, Arriva Trains, EWS and RSSB - all of whom are focused on delivering for passengers and freight customers.

"Good progress is being made generally on the preparation of Britain's railway for standard European products.

"The work on the trials will inform the business case for the fitment of ERTMS, which will potentially bring benefits of greater network capacity, safer journeys, European compatibility and reduced cost."

The Cambrian line was chosen because it is a single-track railway with trains travelling at the relatively low speed of 80 mph.

This means the risk of a head-on collision is unlikely and will allow the Strategic Rail Authority (SRA) to iron out teething problems before installing the system on busier lines.

Rail crashes

Following the introduction of the technology to the West Coast line, the East Coast and Great Western lines, will also have it set up by 2015.

It will cost �3.7bn to install the system across the rail network but efficiencies and savings would generate double that amount, according to the SRA.

ERTMS also includes an automatic braking system that will stop the train if the driver ignores warnings sent to the computer in the cab.

It is believed that rail crashes - like those at Southall and Ladbroke Grove in London which had a combined death toll of 38 - would have been prevented if this new system had then been in operation.