Smart cards similar to those used on London buses and the Underground are to be introduced in Brighton and Hove by the end of next year.

Brighton and Hove Bus and Coach Company and Southern Railway are in talks with Transport for London to bring in an Oyster Card equivalent.

It will work on buses in Brighton and Hove, trains to London and the London network.

Oyster Cards have been available in the capital since 2003, with five million people now holding one, and the yet unnamed Brighton and Hove version would be the first to be integrated with the London transport system.

It is hoped the new system will speed up journeys by cutting the time taken by bus drivers taking money. Passengers who travel to London will also be able to use one card for all journeys, rather than swapping between a bus, rail and Underground ticket.

The cards can be charged with daily, weekly, monthly or yearly travel passes but can also be used for single journeys.

A sum of money is transferred to the card, either by credit card or cash, and each time the person travels the correct amount is debited from their account.

Cheaper fares will be used as an incentive to move to electronic format, and although no decision has been made on prices, tariffs are likely to reflect the discounted offers currently available.

If a person makes a number of journeys in the day, the cost will be capped at the price of a one-day pass. Roger French, manager of Brighton and Hove Bus and Coach Company, said the scheme would allow the company to charge different rates for shorter or longer journeys.

He said the company was trying to move away from cash tickets, although these would still be available.

He said: "We are talking to a number of manufacturers and hope to be rolling something out next year.

"It should cut time, people will not have to carry cash and it will allow us to be more flexible with our pricing.

"We will have buses moving faster and the administration of a lot of cash is expensive."

Other services available include an automatic top-up system which adds money to the card via a debit or credit card when funds go below £5.

A manufacturer has not yet been selected, but Mr French said people will be able to keep the card in wallets or bags and simply wave it near the reader.

Councillor Simon Burgess, leader of Brighton and Hove City Council, welcomed the news.

He said: "It should cut time on bus journeys and help improve the system."

Shelley Atlas, of Brighton Line Commuters, said it would make life easier for commuters.

She said: "At the moment season tickets do not last very long and we are needing to have them replaced all the time.

"It is going to improve that."

The scheme will be in place by the end of next year and initially be available only to season ticket holders. Once the technology has proved effective it will be rolled out to all passengers, with cards and top-ups available from shops, on the internet or by phone.