Manchester will unveil tomorrow a £3 billion plan to become the first place in Britain to charge drivers for the distance they travel on congested roads.

Everyone who drives into the city centre will have to pay a deposit for an electric tag which must be placed inside the windscreen.

The tag will be read from roadside gantries positioned along the 15 main routes into the city centre, with payment deducted as drivers pass under them. Initially, there will be two charging points on each route and drivers passing both points will pay about £6. The total revenue from the scheme is expected to be £118 million a year. Drivers who try to avoid paying will be caught by cameras similar to those that enforce the Central London congestion charge.

Unlike in London, however, drivers will not pay a flat rate for entering a zone. They will pay only at the most congested times of day and those leaving the city centre in the morning, in the opposite direction to the bulk of traffic, will not pay.

Manchester also plans to test satellite-based charging technology that would allow the scheme to move to a second stage in which drivers would pay for precisely the number of miles they travel.

Sir Richard Leese, leader of Manchester City Council, told the Commons Transport Select Committee yesterday that the charging scheme would be preceded by “the biggest public transport programme ever attempted in this country”.

The £3 billion proposal, to be submitted to the Department for Transport in July, will include extending the city’s tram network and a big increase in the number of buses and trains.

Manchester will seek £1 billion from the Government’s Transport Innovation Fund and it plans to borrow a further £2 billion, which will be repaid by income from road charging and the extra collected in fares.

Sir Richard said that the scheme, which Manchester hopes to introduce in 2012, could be a model for road-user charging across Britain.

He said that the public transport improvements would help to persuade the public to support the scheme, despite the 1.8 million-signature petition against road charging on the Downing Street website.

When people in Manchester were asked if they would support road charging if all the profit were invested in transport, 54 per cent said “yes”.

A study by local authorities in Greater Manchester found that if they failed to introduce road charging, they would lose 30,000 jobs that would have been created otherwise over the next decade.

The West Midlands is also considering submitting a bid to the Government but there is much less local political support for road charging.

Geoff Inskip, chief executive of the West Midlands Passenger Transport Authority, which comprises councillors from seven local authorities, said that there was also less support among the public for road charging in the West Midlands than there was in Manchester.

The Government is claiming to be neutral about which city becomes the first to introduce road-user charging, but the Department for Transport is understood to favour Manchester strongly.

Graham Stringer, Labour MP for Manchester Blackley and a member of the Transport Committee, accused the Government of blackmailing the city into introducing road charging by refusing to fund public transport improvements unless the local authorities introduced a charging scheme.

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