Oyster on the rails in January

Oyster readers have been in place at many stations for several months, and an official announcement on the introduction is expected within the next couple of weeks.

The breakthrough will add another mode of transport to the Oyster roster. Mayor Boris Johnson announced in April that the Thames Clippers river service would be Oyster-friendly from this month, and it is understood this will occur on or around November 17.

A spokesman for Southeastern - which serves stations such as Blackheath, Lewisham and London Bridge - said: "It's on stream for January 2010.

"We're up to date with the installation of software. There's a bit of fine tuning involved, but we've got the facilities at most stations to top up Oyster cards for journeys.

"It's going to happen all in one go. It wouldn't work otherwise."

Oyster users have been able to make pay as you go journeys on the underground and DLR since early 2004, but no provision was inserted into train franchise contracts at the time. Previous Mayor Ken Livingstone kicked off negotiations back in 2005, but these were hampered by fears rail firms could lose control of fare-setting.

While barriers were fitted at tube stations in the early 1990s through funding from council tax, rail operators admit the lack of similar gates at most overground stations increases the "revenue risk" of fare-dodging.

The Department for Transport would only reveal that an announcement was due "very soon", but it added "there would be some sort of contract" for introducing Oyster.

Transport for London confirmed that it was working alongside Mayor Boris Johnson to secure the Oyster implementation, and that its discussions with train companies were "at an advanced stage".

A spokesman said: "TfL is investing £40million to install or upgrade equipment at rail stations across London, so passengers can benefit from the speed and convenience of Oyster."