Full passenger services start on Thursday when the 300 kph (185-mph) KTX express train will slice 90 minutes off the journey to the southern port of Pusan, South Korea's second-largest city.

Officials and transport experts expect a profound effect on South Korea, a small and mountainous country with clogged roads.

"Following Japan, France, Germany and Spain, we have become the fifth country to run a high-speed train," Acting President Goh Kun told crowds at the revamped Seoul Station in the centre of the South Korean capital. Security was tight after bomb blasts on trains in Madrid earlier this month killed 191 people.

The train could be "the starting point for a 21st century Iron Silkroad" to Europe, he said before taking a ride on one of the 18-strong fleet of KTX trains with other dignitaries. KTX stands for Korea Train Express.

"These bullet trains will lead South Korea to become the prosperous hub of Northeast Asia, connecting to the North Korean railway, the Russian trans-Siberian railway and the trans-China railway," said Goh, who took over as interim leader on March 12 when parliament impeached President Roh Moo-hyun.

Goh, who is Roh's prime minister, stays in charge until the Constitutional Court rules on the vote.

He said the new service would cut logistics costs caused by traffic jams on motorways and allow people to reach most of the country in half a day. Existing conventional rails would also be freed up for more freight.

"The launching of the high-speed train will help equal growth in every region," he said. Eventually two lines will serve Pusan and the southwestern port of Mokpo and cities along the route.

The train, which is 388 metres (1,273 feet or 424 yards) long and can carry 935 passengers, uses the same technology as France's TGV train network and was built by French engineering group Alstom, which came close to bankruptcy last year but has won a series of orders in recent weeks.

Passengers will be able to reach Pusan from Seoul in two hours and 40 minutes compared with four hours and 10 minutes now. The same 400 kilometre (250 mile) journey will take just under two hours once high-speed tracks are completed all the way to Pusan by 2010.

"Its effects on our life and economy will be enormous," said Choi Yeon-hye, a professor at the Korean National Railroad College. He noted Japan's bullet trains had helped the economy and said he expected a similar effect from the KTX train.

"In a nutshell, the KTX signifies a new step for South Korea to jump into developed country status."