Announced by business secretary Vince Cable, the project comes as the Government announces a £75m fund to speed up development of green technologies for engines. The fund will enable businesses to make and test low carbon technologies that will keep the UK at the forefront of engine design and help safeguard up to 30,000 jobs in engine production. They will be the pilot projects of the Advanced Propulsion Centre (APC), which was announced in July, and will channel £1bn investment from government and industry to fund the development of new technologies over the next 10 years.

Meanwhile, the Milton Keynes project, also announced by the Department for Business, Innovation & Skills, will see £1.5m funding used to put 20 driver-operated two-seater “pods” into action on designated pathways in Milton Keynes city centre. Announced by Business Secretary Vince Cable during a visit to Northampton, the project will be extended by mid-2017 to comprise 100 pods that are fully autonomous and will run on pathways alongside people and will use sensors to avoid obstacles.

The early collaborators on the project are engineering consultancy firm Arup, Transport Systems Catapult, The Automotive Council, and Cambridge and Oxford Universities.

Business Secretary Vince Cable said: ‘By 2050, very few – if any – new cars will be powered solely by the traditional internal combustion engines, so it is important that the UK car industry is at the cutting edge of low carbon technologies. The Advanced Propulsion Centre, launched as part of our Industrial Strategy, will help to position the UK as a leading innovator while securing jobs and strengthening supply chains.

‘Driverless cars are another invention that has the potential to generate the kind of high-skilled jobs we want Britain to be famous for, as well as cutting congestion and pollution and improving road safety.’

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