The 769 project (for GWR at least) was a mighty failure. The units being Tri-Mode had a plethora of technical issues, plus I even heard of union issues with cab design. After many years of trying, it was just an endless stream of money being spent on a project that never worked out. Pity they haven't realised that with the 701s but that is another story...
As for new trains between Reading and Gatwick, GWR have no plans to replace the fleet of 165/166 that operate on the route (to public knowledge at least...). The complexity lies with the fact that it is only partially electrified between Reading and Gatwick, with frequent areas where third rail is missing such as between Shalford and Reigate. This meant that any 165/166 successor would have to be Bi-Mode or even Tri-Mode in order to cope with the route, that toggled with the fact that new 3rd rail is not laid anymore, meant that NR won't fully electrify the route with 3rd rail and there is no one train that is both 3rd rail and diesel (apart from the failed 769/9). The only Tri-Mode trains on order now are the Class 93 for Rail Operations Group which are OLE, Diesel and Battery Power. In short, the only answer now would be to either source a unit that runs fully on diesel, albeit with significantly reduced emissions to the current stock, or to find a 3rd rail unit that also has battery power and enough to work on the North Downs without assistance. Cue the 379 (which has proven battery power and can be fitted with 3rd rail similar to the 387 units), however I am guessing that after the last 'experiment' failed (769), they simply will not commit to another. Perhaps it will be 165/166 forever, or at least till the franchise is renewed and a long term idea is proposed.