THE Mayor of London has announced Tube and bus fare rises designed to encourage people to switch from paying by cash to using the Oyster card.

In many cases, Oyster pay-as-you-go bus and Tube fares will be half the cost of the same journey if you pay by cash.

Ken Livingstone said the aim was to speed up buses and reduce ticket queues at Tube stations.

The use of cash use on buses has already halved over the last year.

Two years ago, the Mayor announced that bus fares would rise by 10 per cent above inflation for three subsequent years to help fund the biggest investment programme on London transport since the war.

This year he announced that the third increase has been reduced from 10 per cent to just 3.8 per cent above inflation.

He said his is possible because Transport for London's finances have been boosted by better management and big efficiency savings, including new advertising contracts.

The fares proposals will also help families with free travel on buses for all under-18 year olds in education, free Tube and DLR travel for under-11 year olds from Easter 2007 and a 50p Oyster fare for all under-16s on the Tube.

Mr Livingstone said: 'Two years ago, I announced tough measures to ensure London's public transport system received the investment it required.

"This has been a success.

"Bus use is now up two million a day on six years ago, Tube ridership is near record levels, investment in public transport has risen to the highest level for 50 years even before the big improvement programmes for the Olympic Games kick in.

"Surveys show passengers believe transport has been improving.

"But alongside that Transport for London has also been achieving financial success through major efficiency savings and greatly increased advertising revenue.

"Due to this I am pleased to announce that the original third 10 per cent fares increase needed to fund the investment programme can be cut by two thirds.

"We will also freeze Oyster single fares on the Tube and help families with free travel for all under-18 year olds in education, free Tube and DLR travel for under-11 year olds from Easter 2007 and a 50p Oyster fare for all under-16s on the Tube.

"At the same time, the big differential between cash and Oyster card fares is designed to speed up the system by getting people to switch from cash to Oyster.

"I want to see every Londoner paying the lowest possible fares by switching to Oyster.' On the buses: The Oyster peak single fare is frozen at £1 and the Oyster one-day cap is also frozen, which means Oyster users will never pay more than £3 regardless of how many trips they take each day.

Passengers who choose not to use Oyster will now pay £2 in cash for the same journey.

The Oyster off-peak fare will rise from 80p to £1 The One Day Bus Pass is frozen at £3.50 and the Weekly Bus Pass increases in line with inflation from £13.50 to £14.00 In the last year, cash use on buses has dropped from ten percent of all journeys to five percent.

The overall increase in bus fares equals RPI plus 3.8 percent.

On the Tube: All Oyster single fares are frozen across London and the daily Oyster cap remains 50p below the One Day Travelcard price The cash single fare for all journeys via Zone 1 will be £4 - this means passengers using Oyster pay as you go for journeys into Zone 1 could save up to £2.50 per trip Travelcards will rise by RPI + 2 percent on average. There is no change to the cash fare for non Zone 1 journeys Cash use on the Tube has halved from just under 15% percent in 2005 to around 6%.

Family friendly: Under-16s able to travel on the Tube and DLR using Oyster pay as you go for just 50p per ride with a maximum cost of just £1 using Oyster.

Under-11s continue to travel free on the Tube and DLR.

16 and 17-year olds in full-time education continue to travel free on the buses.

In addition to the roll-out of Oyster on the North London Railway, once TfL take over in November 2007, the train operating companies now plan to introduce zonal fares from January.

This will result in a single set of fares that will apply on all national rail services in London.

well as simplifying fares for passengers this paves the way for introducing Oyster pay-as-you-go on rail London-wide.