PLANS to overhaul Glasgow's Subway will be backed by £246 million of Scottish Government funding, ensuring automated trains can be introduced to a rejuvenated network within five years.

In an announcement that appeared to surprise Strathclyde Partnership for Transport (SPT), which operates the 115-year-old system, Infrastructure Secretary Alex Neil said he would provide the bulk of the £287.5m needed to fund the modernisation programme. The remaining £41.5m will be provided by SPT.

Ministers had committed to underwriting SPT borrowing ahead of the 2011 Holyrood election to ensure work could begin on the modernisation programme – the first since the world's third-oldest subway was re-fitted in 1979 – and yesterday's announcement will allow tendering for major contracts to go ahead.

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A contract to introduce driverless trains and a new signalling system is expected to be awarded within 18 months and is due to be complete by 2017.

Work has started on renewing Hillhead station in the west end, with design work underway for Kelvinhall, Ibrox and Partick.

New ticketing machines are due to be installed and operational by 2013.