Rail and bus operator Stagecoach is to invest more than £11 million in new coaches for its budget operation Megabus.

The Perth-based transport group - owners of Warwick-shire bus firm Midland Red (South) - has placed an order with manufacturers Volvo and Plaxton for 45 new 15-metre coaches. They will be the longest in Britain and the first of their kind to be manufactured in the UK.

Brian Souter, Stagecoach Group chief executive, said: "This new investment will provide a further step-change in the quality of service we provide our customers. The new vehicles will bring our investment in megabus.com to around £18 million in the past 18 months, and we see further opportunities to attract more people to low-cost inter-city travel."

The first of the new coaches will be delivered from February next year, with the full order completed by the end of May 2007, Stagecoach said.

Megabus operates a network of services covering around 40 locations in the UK and carries around two million passengers a year.

In June, higher annual profits at the top end of expectations after growing passenger numbers at its operations helped offset higher fuel costs.

Stagecoach said pretax profit excluding amortisation and exceptional items for the year to April 30 came in at £140.6 million compared with £131.2 million a year ago.

The investment in Megabus follows a campaign by Stagecoach to convince budget travellers to dump airlines and switch to low-cost coach travel, which it says minimises further damage to the environment.