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Transport for London is tendering for a signalling contractor to upgrade signalling on the Circle, District, Hammersmith and City and Metropolitan lines. The contract is the single biggest piece of work on the tube.

The work on the so-called subsurface lines was being carried out by the Metronet consortium before it collapsed into receivership and was taken over by Transport for London (TfL).

Richard Parry, managing director of London Underground, said: 鈥淭he original contract that we inherited was over-priced and incompatible with other signalling systems on the tube network.鈥�

Following on from the National Audit Office report into Metronet's collapse, TfL commented:: "Significant operational issues had been identified with the proposed plan, in particular, a plethora of additional signals at great cost, the lack of interoperability with other line signalling systems (that were being installed by Tube Lines) and the level of system maturity."

Coupled with a fleet of 191 new air-conditioned walk-through trains on the lines, the new signalling could deliver a nearly 50% increase in capacity and save 鈥渕illions of pounds鈥� for the public purse, according to TfL.

A spokesman said the exact size of the contract was commercially sensitive but would run into "hundreds of millions of pounds." Contracts are due in on Friday 18 December with work beginning late next year. Completion is due for the Hammersmith and City, Circle, Metropolitan lines by 2016 and on the District line by 2018.

The operator said that 拢2.5bn had already been saved through the renegotiation of contracts, revising the upgrade programme, better procurement and operational efficiencies.