Overcrowding is still a problem for many passengers on the network
Ruth Kelly said £10bn would be invested by 2014 to increase services and lengthen trains.
Among pledges were an extra 1,300 train carriages and upgrades at 150 stations.
Consumers raised concerns about fare rises, while Lib Dems said the plan was a "missed opportunity", and Tories said it was "reheated announcements".
Other key proposals from the White Paper included:
The aim is to carry at least 180m more passengers within seven years
More than 150 stations are to be upgraded and refurbished at a cost of £150m - London Bridge and Blackfriars stations to be upgraded by 2015 and 2011 respectively
£5.5bn Thameslink modernisation programme approved, trebling the number of stations on that cross-London network
£425m for improvements at Reading Station
£128m for improvements at Birmingham New Street station
Punctuality target of 92.6% of trains by 2014, up from the current 88%
No closures for rural rail lines
Protection remains on regulated fare rises - which must be no more than 1% above the annual rate of inflation
The government believes its plans will allow trains to carry twice the number of passengers and freight by 2030, but acknowledges that estimate might be outstripped by demand.
If that is the case, "more radical options" may have to be considered, particularly on the London-Birmingham-Manchester corridor and on London's busiest commuter routes.
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It favours extra long trains of up to 16 carriages over double-decker trains, but says a high-speed magnetic rail link and dedicated freight lines were too expensive.
Ms Kelly told MPs that the government had drawn up "the most ambitious strategy for growth on the railways in over 50 years".
She said the challenge was "to provide a railway that carries more passengers, on more and better trains and on more frequent, reliable, safe and affordable service."
She added: "We can't know precisely what our railway will look like in 30 years' time but now we can be confident of making it bigger, stronger and more flexible."
But fares will have to cover some of the cost as Ms Kelly said government subsidies had nearly doubled during the "difficult years" of Railtrack.
"It is right that we now seek to return it closer to historic levels," she said.
She said most people used "regulated fares" which were capped so prices could not rise more than 1% above inflation.
But the transport union TSSA said passengers faced a 34% rise in fares.
'False dawn'
Also in the White Paper, Ms Kelly said the government was committed to Crossrail, a proposed high-speed rail link from Berkshire to Essex via central London - and was currently trying to "pin down" private sector funding, to match government funding.
But Conservative Theresa Villiers said it was another "false dawn" for the £15bn scheme, saying it was "getting more distant by the day".
She added that overcrowded trains were packed so tight "it would be a criminal offence to transport animals in the same conditions".
And Lib Dem transport spokeswoman Susan Kramer said the White Paper was a "missed opportunity" to get people out of cars and planes and onto the railways and suggested most of the money outlined had been announced before.
She said it "seems extraordinary" that the government had not made more mention of Crossrail in the paper.
George Muir, director-general of the Association of Train Operating Companies, described the proposals as the "first plausible plan for expanding the railway" in recent years.
But passenger groups have been angered that some train companies have raised off-peak prices by up to 20%.
Those carriages aren't going to be put into place until 2014 so that's a long wait and passenger numbers keep going up
Julia Thomas
Transport 2000
Julia Thomas, of campaign group Transport 2000, told BBC Radio Five Live that the White Paper was a "major step in the right direction" but she had two main concerns.
"Firstly, those carriages aren't going to be put into place until 2014 so that's a long wait and passenger numbers keep going up," she said.
"Secondly, although they are concentrating on bottle necks like Reading and Birmingham New Street where there are major delays, there are quick gains to be made through signal improvements, looking at time tabling that would help passengers now."
TSSA general secretary Gerry Doherty said: "Passengers will be forced to pay twice for improvements which are meant to benefit them, first as taxpayers and then as rail users.
"Ministers claim they want to encourage rail travel and then kick passengers in the teeth with huge regular hikes in fares. They are pricing people off rail and onto the roads."
The "Delivering a Sustainable Railway" white paper
Secretary of State for Transport, Ruth Kelly 
The government of the United Kingdom has outlined its plans for the development of the Britain's railway network in a white paper presented to Parliament by the Secretary of State for Transport, Ruth Kelly.

Ruth Kelly described the report as "the most ambitious strategy for growth on the railways in over 50 years" and announced that capacity will be increased to cope with an expected 20% growth in passenger numbers over the next seven years through a £10 billion investment.

The government is to continue to limit the rate of increase of regulated tickets, which include standard season and saver tickets, to a maximum of 1% above inflation, and plan to introduce a simplified ticketing structure of four basic ticket types. 

Today's announcement also extended the government's commitment made in March of this year to fund extra carriages. An additional 300 brings the total to 1,300 carriages to be acquired to relieve overcrowding. 

The impact of the investment the government has outlined will be concentrated in tackling areas of high overcrowding on the rail network. In particular, Ms Kelly has highlighted a number of key projects. These include the improvement of Reading and Birmingham New Street stations and the approval of the Thameslink modernisation programme. 

150 stations across the network will be upgraded and refurbished at a cost of £150 million.

The largest opposition party, the Conservative Party, greeted the release with much scepticism, saying that the paper contains "reheated announcements that are years later than promised". A spokeswoman for the Liberal Democrats described it as a "missed opportunity" to encourage more people to use trains in favour of cars or planes and suggested that much of the investment outlined in the document had been announced before.

George Muir, of the Association of Train Operating Companies which represents the companies providing passenger train services on the British rail network, said that the white paper is the "first plausible plan for expanding the railway" in recent years.