So says the press release from TfL...

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(31 March 2006)

*Mayor welcomes Oyster commitment in new rail franchise*

Oyster ticketing on rail services in London came a step closer today
with the news that it will be required as part of the new South West
Main Line franchise.

The invitation to tender (ITT) for the franchise was today issued by
the Department for Transport (DfT) and it specifically requires the
successful bidder to provide Oyster validating machines at all London
stations by 2009.

The franchise is currently managed by the train operator South West
Trains and includes routes out of Waterloo station to key London
stations such as Kingston, Richmond and Wimbledon and destinations on
the south coast.

Mayor of London Ken Livingstone said: "It is vital we have an
integrated ticketing system between mainline rail and the Tube and bus
network so that passengers can enjoy the full benefits and convenience
of Oyster.

"This is a major step towards fully integrated ticketing in London."

Ian Brown, Managing Director TfL London Rail, said: "TfL's vision for
rail is about putting passengers first.

"Five million people already use Oyster every day in London. This means
that from 2009, passengers on the on the South West Main Line will be
able to take Oyster ticketing integrated with transport modes across
London including the Tube, bus and DLR.
TfL recommendations

"We are pleased to see the inclusion of a number of TfL's
recommendations in this franchise specification. We will continue to
work to make rail services that serve London an integrated part of the
transport network."

TfL welcomes the inclusion of its recommendations, which were made
during the DfT's consultation for the South West franchise in January
this year.

The specification outlined demands that the successful bidder for the
franchise will:

* Provide Oyster validating or ITSO equipment at all stations on the
South West Main Line franchise by 2009

* Work towards ticket gates at Waterloo - to improve security and deter
fare evasion


As one of the stakeholders for the consultation, TfL presented its
recommendations to the DfT to secure improvements for passengers and
industry in London, and to ensure that their needs are met in the
franchise for the short-, medium- and long-term.

Oyster ticketing will also be available on the North London Railway
from Autumn 2007, when the line will be transferred to TfL. The
franchise is currently operated by Silverlink Metro.

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http://www.tfl.gov.uk/tfl/press-cent...t.asp?prID=742
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This is good news in my books. One day in the not-too-distant future
Oyster Pre Pay will be accepted on all rail services in London, whilst
I suspect that a nationwide rail smartcard system will remain a pipe
dream for a lot longer.