Control of the tram system in south London is to be handed to Transport for London (TfL) in a £98m deal.

Tramtrack Croydon - the consortium which runs Tramlink - has accepted the offer from TfL to buy the company, subject to final checks and agreements.

Following completion of the deal later this summer Tramlink will be managed by TfL's London Rail directorate - which has promised to improve services without raising fares.

Taking control of the company means TfL will no longer have to make compensation payments for changes to fare and ticketing policy which last year amounted to £4m.

Current fares and ticketing arrangements are not expected to change but TfL has said it aims to make a number of improvements to the network.

It hopes to double off-peak services between Elmers End and Beckenham Junction from two trams an hour to four on Monday to Saturday evenings and on Sundays.

Additional services will also be run on other lines.

And graffiti and vandalism across the network will be targeted as part of TfL's promise to improve the environment for passengers on the 28km light rail system.

Mayor of London Ken Livingstone said: "Bringing Tramlink into the control of TfL is excellent news for Londoners.

"This will mean we can plan how to make the improvements that are required to cater for ever increasing numbers of passengers and provide them with the very best possible services."

The deal

By selling the company now, the parent companies in the consortium which currently owns Tramtrack Croydon will make a healthy profit.

And they will also avoid an anticipated financial restructuring required before repayment is due for the construction of the existing Tramlink infrastructure on April 30, 2009.

Selling the business to Transport for London will also end years of dispute about who should pay for upgrading the network.

Tramtrack Croydon won the concession to design, build, operate and maintain the Tramlink system in 1996, under a 99-year private finance initiative contract.

However TfL says the current concession agreement does not offer enough flexibility for it to be able to work with Tramtrack Croydon to deliver the best service for London.

Under the terms of the 99-year concession agreement Tramtrack Croydon retains the revenue generated by Tramlink.

And TfL is forced to make compensation payments to the company for any changes to the fares and ticketing policy introduced since 1996.

Watchdog is happy

The chairman of London TravelWatch - the watchdog for transport users in and around London - welcomed the move by TfL to take greater day-to day control of the Tramlink.

Brian Cooke said: "The ever increasing numbers of passengers using the tram network has led to a demand for new routes and better services.

"However, to continue to grow and develop, it is clear that Transport for London must have greater day-to-day control of the tram network.

"We also hope this change will speed up the development of other tram networks around the capital."

He added: "We welcome the commitment to increase services between Elmers End and Beckenham Junction which is long overdue, and to maintain existing fares and ticketing arrangements which we believe is very important.

"We also welcome TfL's promise to further improve the standards of both trams and tram stops which have been neglected in recent years."