Business Secretary Vince Cable announced that driverless vehicles will be allowed on public roads in three UK cities in January next year.
After being given a tour of a private test track in Nuneaton, Warwickshire, in a GPS-guided Ford Mondeo estate, Mr Cable confirmed the trials would last for up to three years.
The Minister told reporters: “The technology is now there in the vehicles – we want to match it up with satellites so that potentially you get whole fleets of cars operating much more efficiently with less congestion.
“There is a lot of work to be done, both on the technology side and on developing the system of regulation so that it can operate extremely safely, but we want to get this experiment launched next year on real roads.”
Asked for his thoughts on the specially-adapted Mondeo, which has a saucer-shaped GPS receiver and sensors to trigger braking and communicate with traffic lights, Mr Cable replied: “It was a very pleasant, very safe experience.
“Within a few seconds the driver had taken his hand off the wheel and we went around the corner.”
UK cities have until the start of October to submit bids for a share of the £10m allocated to host the trials, with up to three cities being selected.
But motoring groups have warned that road users will be wary of the introduction of driverless vehicles.
Ministers have also launched a review to look at current road regulations to establish how the UK can remain at the forefront of driverless car technology and ensure there is an appropriate regime for testing driverless cars in the UK.