STAGECOACH has revealed a £3.5bn investment plan for Britain's biggest commuter railway to counter competition for its franchise.

The group said if it wins the extension on its contract for South West Trains it will turn it into the "best commuter network in Europe". The plan includes £1.5bn for new Siemens trains, similar to those on the Heathrow Express service, which would replace all slam- door trains by the end of 2004.

An extra £137m would be spent refurbishing rolling stock.

It would also create about 70,000 extra seats for peak hours and a redevelopment of the network's busiest stations, Waterloo, Clapham Junction and Vauxhall.

The move aims to fend off a £4.5bn investment proposal from rival bidder GNER.