The “Streetcar”, which will carry up to 130 people, has been designed to attract image-conscious motorists who would not like to be seen on a bus.

The Government is supporting the vehicle because it will be ten times cheaper than building tram lines. Cities across Britain which had hoped to bring back trams will be told instead to consider buying Streetcars.

First Group, the public transport operator which developed the Streetcar, has banned staff from using the word “bus” when referring to the vehicle.

It hopes to overcome the stigma attached to bus travel which was fuelled in the 1980s by Margaret Thatcher’s reported remark that a man over 30 who was still catching the bus was a failure in life.

The Streetcar’s tyres are concealed behind covers, or “spats”, which swivel as the wheels turn. The 61ft body, similar in length to a bendy bus, has been streamlined to look like a modern tram. The bright strip lighting on buses has been replaced by spotlights, with shaded areas for those who want to snooze. There will be more single seats as well as lounge-style curved seating in the rear. Later versions of the Streetcar will have a guidance device which will follow dots on the road and allow the vehicle to steer itself.

Barbara Bedford, the project director for Streetcar, said that it had been designed to give passengers “much more sense of personal space than a bus”. She said that many car drivers surveyed by First had denied that they caught buses but admitted using “Park and Ride”.

She said: “We found that image and label were important, particularly for males. The bus has had a difficult history and we are trying to reposition it with a more tram-like appearance so it becomes aspirational.”

But Ms Bedford admitted that the Streetcar, at £320,000 per vehicle, was 50 per cent more expensive than a conventional bendy bus. First hopes to justify its initial investment in 100 vehicles by attracting 30 per cent more passengers on routes served by Streetcars. It aims to reduce car traffic on Streetcar routes by 10 per cent.

In return for supplying the vehicles, First will require local authorities to install guided busways, lanes and devices that turn traffic lights to green when a Streetcar approaches.

Streetcars will begin operating in York by the end of the year, followed by Sheffield and Leeds. Swansea, Reading, Bath and Glasgow have also expressed an interest in the vehicles.

Alistair Darling, the Transport Secretary, said that cities wanting to build tram lines should consider Streetcars first “to see if there is enough demand for trams”.

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