Labour will fully nationalise the train network within five years of coming to power, with a pledge to guarantee the cheapest fares as part of “the biggest reform of our railways for a generation”.

One of Labour’s first major acts in government will bring all passenger rail into national ownership under Great British Railways as contracts with private operators expire, a plan endorsed by the architect of the Conservatives’ own rail plan.

Labour will announce it plans to cut waste and claw back shareholder dividends, saving £2.2bn. It will establish a watchdog, the Passenger Standards Authority, to scrutinise the new system. Passengers will be offered best-price ticket guarantees, automatic delay repay and digital season tickets across the network.

bIn a speech on Thursday, the shadow transport secretary, Louise Haigh, will say renationalisation “is not going to be easy and it will take hard graft, but it will be my mission to get us to the right destination and to deliver for the Great British passenger”.

Labour insiders hailed the announcement as the moment the party would begin to champion its more radical proposals in the run-up to an election campaign, after a number of U-turns including over green investment.