More than eight million tickets were issued last year, causing increasing anger among drivers. But now local authorities are to review the whole penalty system.

Private companies which employ traffic wardens will no longer have targets based on the number of tickets they issue. Instead, they will receive bonuses for minimising the number of penalties that are incorrectly issued.

Wardens will have more discretion to be lenient with drivers who stop briefly on yellow lines or overstay on meters.

Typically, the “grace period” for drivers to obtain change will be doubled to ten minutes.

Companies will also be penalised for employing inexperienced or poorly-trained wardens. The new rules are part of a “model contract” drawn up by a working group of local councils and parking companies, after they became overwhelmed by complaints.

The Government had also threatened to to stop authorities making excessive profits from parking regulations.

Under the new contract, councils will still be allowed to make a profit to invest in services such as free travel for the elderly. But income is likely to fall as fewer tickets are issued.

Motorists paid out just under £1 billion in parking fees and tickets in England in the year to March 2003, up more than 50 per cent since 1998.

The British Parking Association, the industry body overseeing the new contract, said that it wanted to make the relationship between drivers and wardens “less adversarial”.

Kelvin Reynolds, its technical director, said: “Performance will be measured largely on keeping the streets free of congestion, rather than the number of penalties issued or revenue generated.

“Attendants will have much more scope to use discretion to reduce the number of drivers who feel that they have been unfairly treated.”

Wardens will be ordered to focus on busy junctions and bus lanes, where illegal parking holds up traffic, rather than on residential streets.

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