Enviroment: UK firms lured with pounds 10m to wheel out car of the futu re

British industry was yesterday challenged to invent the car of the future, with up to pounds 10m of taxpayers' money to help them.

Even though there may be no UK-owned mass- production car makers any more, both the Government and the motor industry believe Britain has everything to play for in developing and commercialising technologies needed to cope with the crises of pollution and congestion spreading around the globe.

UK firms still play leading roles in designing cars and making components, and as many cars are being made in Britain as ever before.

The Foresight Vehicle Project links the Government, industry, universities and other research laboratories in attempting to develop the technologies which will squeeze more traffic on to the roads while keeping it flowing, reduce harmful emissions and help drivers to navigate, avoid jams and motor more safely.

Within a couple of decades, the project's launch conference in Birmingham heard yesterday, driving will be transformed by the application of advanced electronics. Vehicles will be in constant communication with each other and with computer systems linked to roadside beacons, but the motorist will be blissfully unaware of this continual digital chattering for most of the time. Electronics will be involved in tolling, enforcing speed limits and permitting vehicles to travel safely at speed on crowded motorways.

When drivers need to interact with these systems, to demand information or entertainment, they will use spoken commands.

Reliable software for speech recognition is expected to be commonplace.

Cars will be very much lighter, requiring less energy to move. And while there will probably be fewer volume manufacturers and fewer basic types of vehicle, or "platforms", they will appear to be more varied.

This is because there will be "mass customisation," with customers given a much wider choice of components and trims such as headlights, wheels and interior furnishing.

As for propulsion, the cars of the future are expected to be hybrids with both electric motors and an ultra-clean internal-combustion engine to generate electricity for the motors and battery storage. Alternatively, drivers will fill up with compressed hydrogen, which will be used to generate power for electric motors in a fuel cell.

This, the conference heard, is the received wisdom on what cars will be like circa 2020.

Firms based in Britain, particularly small and medium-sized ones, are being invited to join with partners, competitors and academics in devising research and development projects to produce the necessary technologies.

Up to half the funding will come from the Department of Trade and Industry. The plan is for devices to be ready for demonstration by about 2005, so that they can go into mass production by 2020.