The charges would apply only during peak hours, but drivers unable to find an alternative route or switch to public transport could face bills of £30 or more per week.

Trials of the technology, which uses roadside beacons to detect tags in the windscreens of passing cars, have proved successful and more extensive trials will begin shortly in South London. Other cities are closely watching the London trials and could copy the scheme.

Drivers would be encouraged to set up a direct debit, and charges would be automatically deducted as they passed beacons. They would receive regular bills showing which routes they had used and the charges they had incurred.

The charges could be levied on busy routes such as the North Circular and in congested town centres such as Hammersmith and Bromley. But unlike the existing charging zone, there would be no flat-rate daily fee for an area, but a charge varying by the time of day and the route chosen.

The rates have yet to be decided, but drivers who used the busiest routes would be likely to pay at least as much as those entering the existing zone, where the daily charge is due to rise to £8 in July.

The scheme could be introduced within four years in one or two boroughs and then, if it proved successful, be extended to cover congestion hotspots across the capital the following year.

Bob Kiley, the Commissioner of Transport for London, wants the scheme to begin as soon as possible because he is concerned that the existing zone-based charging system covers only a fraction of the city’s congested roads.

In an interview with The Times, Mr Kiley said: “London could be the test-bed for the rest of the country.

“I want a surgical approach, aiming at the pinch points. The tag and beacon system would give drivers real choices: they could switch to an improved bus service or drive another route. If we were really aggressive about it we could have demonstration projects in four to seven years. If it was incredibly successful you could extend it within six months.”

Mr Kiley, whose proposal has the full backing of Ken Livingstone, the Mayor of London, accepted the scheme would be fiercely resisted by some borough councils.

“I’m not saying the boroughs are going to jump up and down and say, ‘Hallelujah, salvation is at hand’. But the problem that we are facing is so overwhelming and daunting that I believe we should just go for it and learn from it as we go along.”

Mr Kiley said the tag and beacon technology was far more practical than the satellite-based charging system being considered by the Government.

“The satellite system is 10-15 years away because the satellites it needs haven’t even been launched yet. I’m a big believer in tackling congestion right away with simpler technology.”

While Mr Livingstone already has the powers to introduce charging across London, the Government would have to approve the on-board tags.

Ministers are keen to ensure that the same tag could be used in any city which decided to follow London’s lead.

Mr Kiley said: “If you are a travelling salesman visiting six cities you don’t want to have six different cards in your windscreen.

“We also don’t want to be so unique and precious about what we do in London that we are making it difficult for other cities to follow suit. We should do something they are comfortable with.”

TfL realises that charging on congested routes will encourage drivers to find toll-free rat runs. It plans to tackle this by introducing more traffic calming, including road humps and chicanes.

London First, the business lobby group, cautiously welcomed Mr Kiley’s proposal but said it should not be seen as an alternative to building underpasses or remodelling junctions at the worst pinch points.

Irving Yass, the group’s director of policy, said: “Road pricing is part of the solution but it is not a panacea and there is still a need for road improvements in some places.

“But this is a step in the right direction towards a more general distance-based charging system.”

TAGS TO TACKLE CAPITAL CONGESTION

• Tag and beacon systems are already in operation for regular users of the Dartford crossing and the M6 Toll. Singapore’s electronic road pricing system also uses the technology to levy charges according to the congestion
• The tags would cost between £5 and £50 depending on the level of sophistication chosen after trials. The more expensive tag would allow drivers to see how much they had been charged and how much credit they had left
• Drivers would either be given the tags or be asked to pay a fee which would be reimbursed through credits for using the roads
• The beacons would be installed inside gantries similar to lampposts, with cameras on top to catch evaders
• Initial trials have been successfully conducted on Old Kent Road and Commercial Street. Further trials involving 200 volunteer vehicles will begin shortly at 20 sites in South London. Transport for London said that the initial trials showed “it was highly likely that the technology would work”

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