There will also be a regional identifier of two characters - one representing a region of Britain, the other referring to a town - which will show where a car has been purchased. This is similar to the original system used before the second world war, when each county in Britain had an allocation of two-letter combinations.
The revamp will start in September 2001 - the biggest shake-up since 1963 - and ministers hope it will end the August dash by customers eager to drive off with a brand new car. More than half a million cars - nearly a quarter of the annual total - are sold in this one month, distorting carmakers' production schedules and causing chaos for dealers.
As an interim measure, the yearly change will be abandoned this year - meaning that motorists purchasing cars in March next year will have "T" plates and those buying in August 1999 will drive off in "V" registration vehicles.
Some will miss the social cachet derived from having the very latest registration plate. Drivers often put off trading up to a better model or marque simply to have the new number plate. Although registrations indicating the year of purchase were first introduced on 1 January 1963, it was not until four years later when the start of the new car year was moved to 1 August that sales took off.
This was the beginning of the one-upmanship which now characterises the change of plate. Those with E plates in 1967 were outdone by those with the new August F plates and the tradition became embedded in motoring lore.
However the industry was not so pleased. Although happy to sell cars - the best-ever August sales were achieved in 1997 when a bumper 525,539 cars were purchased - motor manufacturers say this could be more evenly spread throughout the year without harming current sales.
"We are very pleased to see the back of the current system. A change has been long overdue," said a spokesman for the Retail Motor Industry Federation, the trade association for dealerships. "The August system has been a complete headache and a classic way of how not to do things. Car buyers will benefit from the change as dealers will be more specific about delivery dates."
A source close to Gavin Strang, the transport minister who will launch the Government's plans, said that the new system would last for "at least 40 years".
Motoring organisations welcomed the moves saying that in the rush to satisfy demand many dealers let cars go "without proper preparation". "We get dozens of calls for new cars in early August because cars leave forecourts without being fully roadworthy," said the RAC.
The system began with the letter A being placed after the numbers on a registration plate, so that cars registered in 1963 would have plates such as BCD 123A.
Once the alphabet was exhausted, the year-indicator letter moved to the front of the plate, which would read, say, A123 BCD. This year will see the prefix letter S introduced.
By 2001, a typical number plate will look like this: ABC 12 YZ. The first three letters are specific to the car, the next two numbers will refer to the year the car was bought and the last two characters will denote the place of purchase.
The Driver and Vehicle Licensing Agency will still sell much sought-after plates such as ME 1 ME and YOU 1 DO to drivers who wish to personalise their number plates. At present, such sales generate millions.
Some experts were predicting yesterday some number plates would become highly-prized for the status a registration number denoting a fashionable part of Britain would confer.
Police in Britain are keen to see such a system, because it would help trace stolen cars.
Regional plates are not new. For example, many cars registered in Birmingham still have an "O" in the middle of the three letters on a plate. However, because of the way new cars are distributed, the registration number no longer automatically relates to the place they are purchased.
Another problem is that not all cities and towns have one code that is unique to them. For instance, "PO" is just one of many combinations of letters that show a car was registered in Portsmouth.Reuse content