Electrification of a key rail line is to be extended to south Wales, the UK government has announced.
A plan to electrify the Great Western line from London to Berkshire and Oxfordshire has already got the go-ahead.
Now, the transport secretary Philip Hammond has said the Great Western electrification would be extended to Bristol and Cardiff. But he ruled out a further extension to Swansea, although he announced plans for electrification of Welsh valley routes.
Mr Hammond also announced that the Government was going ahead with a revised bid from Agility Trains, a consortium led by Hitachi, for the new Intercity Express programme (IEP) which will see most of the old Intercity 125 trains replaced.
The acceptance of the Agility bid means that Hitachi will go ahead with a carriage and train-building facility at Newton Aycliffe in County Durham, bringing the prospect of hundreds of new jobs to north east England.
Mr Hammond said London-Cardiff journey times would come down to one hour 42 minutes, while 22 minutes would be saved on London-Bristol journeys. He added that the plans would be a boost for passengers and for the economies of south Wales and north east England.
The IEP is a £4.5 billion deal, while the Great Western electrification between Cardiff, Bristol and Didcot in Oxfordshire is worth £704 million.
The IEP go-ahead means the building of a combination of around 100 electric trains and bi-mode diesel/electric intercity trains which will run to Great Western line stations, including Oxford, Swindon, Reading, Cardiff, Swansea, Bath and Bristol, and to East Coast Main Line stations such as Peterborough, York, Doncaster, Newcastle, Edinburgh, Aberdeen and Inverness.
There will be 500 new carriages and 11,000 more peak-time seats for passengers on the Great Western and East Coast lines.
Mr Hammond said the government had established "that a strong high-level case may exist for electrifying some of the Valley lines north of Cardiff". He said the Department for Transport would now work with the Welsh Assembly Government "to develop a business case for the electrification of the Cardiff Valley lines".
Mr Hammond went on: "This is good news for jobs, passengers and the economy. Our decision to buy a new fleet of trains and electrify new lines will allow rail passengers along the Great Western and East Coast corridors to benefit from massive improvements to journey times, more seats and more reliable services."
First Great Western managing director Mark Hopwood said: "This is great news for our customers and the railway industry as a whole as it will bring reductions in journey time and a more reliable, environmentally friendly service."
Agility Trains said it was delighted at the news while Paul Plummer, Network Rail's planning and development director also welcomed the announcements.
Ashwin Kumar, rail director of train customer watchdog Passenger Focus, said: "Many of the inter-city trains running on the East Coast and Great Western main lines are over 30 years old and more modern trains will be desperately needed in the near future as passenger numbers continue to rise."
Bob Crow, general secretary of the Rail Maritime and Transport union said: "We welcome any investment that drags the UK's railways out of the slow lane but this announcement cutting the power down to Swansea is a kick in the teeth for a huge swathe of south Wales.
"This is another case of government playing politics with vital rail infrastructure projects and at a time when the train operators are bleeding a fortune out of the railways we could easily afford modernisation of the entire network if we simply renationalised."