The capped regulated price of train tickets will rise by three per cent over inflation over three years, starting in 2012.
The price for those commuting long distances into the capital could rocket, with a season ticket from Brighton to London set to rise almost £1,000 a year. The Campaign for Better Transport has calculated the hike will translate to a 30 per cent increase in fares by 2015, including the effects of inflation.
The hikes will help the government reduce its £5bn annual spend on rail transport.
Those travelling by bus will not be spared, with bus subsidies paid to operators being slashed across the country.
Even motorists will be hit, with road and bridge tolls set to rise, including the Dartford River Crossing in Essex.
The price hikes will be used to plug the gaps caused by a dramatic lurch in the transport budget.
Overall the Department for Transport will see its budget decline 21 per cent in real terms over the next four years, with capital spending dropping 11 per cent.
However, the new Mersea Gateway Bridge, a large-scale capital project, will still go ahead despite speculation it could face the axe, as will a project to widen sections of the M1 motorway.
Transport secretary Philip Hammond said: “While we have had to make some difficult choices, I am confident that our focus on the long term will ensure that we can continue to build a transport system that supports economic growth and reduces carbon.
“We have secured investment to allow us to go ahead with important projects such as high-speed rail, support for ultra-low carbon cars and major road-building and public transport programmes.”