The money will be used to support car club development in the UK, with the Government saying that it views such schemes as an effective way of tackling congestion, reducing the level of CO2 emissions and improving the quality of life of citizens and communities.

Transport Minister Norman Baker said: 'The Coalition Government, in its programme for government, has been clear in its commitment to sustainable travel initiatives such as car clubs to help achieve a greener and more sustainable transport sector.

'The figures speak for themselves – each car club vehicle can result in taking 24 private vehicles off the road and the low carbon vehicles used typically emit approx 33% less CO2 than the average car. This is why we are supporting the continued growth of car clubs across the country.'

Today’s announcement will combine with Transport for London’s continued funding to support the provision of core services developing car clubs.

Mayor of London, Boris Johnson, said: 'Car clubs are a brilliant idea and membership is booming in the capital. A quite staggering three quarters of the UK’s car club cars are located in our great city, and Londoners joining up have found they are able to save thousands of pounds by avoiding all the hassle of repairs, services and insuring their vehicles. Our focus now is to increase membership in the capital’s outer boroughs and I welcome all extra support for these cracking clubs, which are becoming indispensable to their thousands of members.'