Drivers face having their every move tracked by a 'spy in the car' black box.
The system will constantly check a vehicle's speed - making cameras redundant - and allow for pay-as-you-go tolls.
The £36million EU project is partly funded by the UK Government and backed by car makers and the telecoms industry.
It will be unveiled later this year with a view to its integration into future cars. Manufacturers suggest this could be as early as 2013.
Vehicles fitted with the system will emit a constant 'heartbeat' pulse revealing their location, speed and direction of travel.
EU officials believe the technology will significantly reduce road accidents, congestion and carbon emissions.
But civil liberties campaigners say it will have profound implications for privacy by creating a Europe-wide system of Big Brother surveillance.
The European Commission has already
asked governments to reserve a radio frequency for the system to operate on.
Engineers say the system will be able to track cars to within a yard, making it significantly more accurate than existing satellite navigation technology.
Experts say the system will link up easily with the pay-as-you-drive road tolls being backed by the Government.
The system allows cars to 'talk' to one another and to roads wired up to the system. A communication device behind the dashboard transmits the car's location every half a second.
The messages are transmitted through mobile and wireless networks, as well as on short-range microwave or infrared routes. Vehicles will be able to warn each other if they are on collision course.
The location data will also be picked up by roadside detectors and mobile phone towers. That will allow traffic lights to turn green when vehicles approach.
Data on cars will also be sent to traffic control centres to allow police or civilian controllers to monitor and even direct vehicles.
General Motors - the troubled owner of Vauxhall - is among those trialling the technology.
The Department for Transport said there were no plans to make the system mandatory in new cars. Its introduction will be on a voluntary basis, according to Paul Kompfner, manager of the Cooperative-Vehicle-Infrastructure Systems project.
He added: 'A traffic controller will know where all vehicles are and even where they are headed.
'That would result in a significant reduction in congestion and replace the need for cameras.'
He said the scheme needed wide uptake to work.
Critics point out that roads in the UK are already subject to the tightest surveillance in the world.
Police control a database that receives information from automatic number plate recognition cameras and can track the journeys of up to ten million drivers a day.
Although the details can be stored for up to five years, ministers have been told that recognition and speed camera technology is 'inherently limited'.
Simon Davies, of Privacy International, a watchdog, said: 'If you correlate car tracking data with mobile phone data, which can also track people, there is the potential for an almost infallible surveillance system.' continues here
The system will constantly check a vehicle's speed - making cameras redundant - and allow for pay-as-you-go tolls.
The £36million EU project is partly funded by the UK Government and backed by car makers and the telecoms industry.
It will be unveiled later this year with a view to its integration into future cars. Manufacturers suggest this could be as early as 2013.
there is the potential for an almost infallible surveillance system…
Vehicles fitted with the system will emit a constant 'heartbeat' pulse revealing their location, speed and direction of travel.
EU officials believe the technology will significantly reduce road accidents, congestion and carbon emissions.
But civil liberties campaigners say it will have profound implications for privacy by creating a Europe-wide system of Big Brother surveillance.
The European Commission has already
asked governments to reserve a radio frequency for the system to operate on.
Engineers say the system will be able to track cars to within a yard, making it significantly more accurate than existing satellite navigation technology.
Experts say the system will link up easily with the pay-as-you-drive road tolls being backed by the Government.
The system allows cars to 'talk' to one another and to roads wired up to the system. A communication device behind the dashboard transmits the car's location every half a second.
The messages are transmitted through mobile and wireless networks, as well as on short-range microwave or infrared routes. Vehicles will be able to warn each other if they are on collision course.
The location data will also be picked up by roadside detectors and mobile phone towers. That will allow traffic lights to turn green when vehicles approach.
Data on cars will also be sent to traffic control centres to allow police or civilian controllers to monitor and even direct vehicles.
General Motors - the troubled owner of Vauxhall - is among those trialling the technology.
The Department for Transport said there were no plans to make the system mandatory in new cars. Its introduction will be on a voluntary basis, according to Paul Kompfner, manager of the Cooperative-Vehicle-Infrastructure Systems project.
He added: 'A traffic controller will know where all vehicles are and even where they are headed.
'That would result in a significant reduction in congestion and replace the need for cameras.'
He said the scheme needed wide uptake to work.
Critics point out that roads in the UK are already subject to the tightest surveillance in the world.
Police control a database that receives information from automatic number plate recognition cameras and can track the journeys of up to ten million drivers a day.
Although the details can be stored for up to five years, ministers have been told that recognition and speed camera technology is 'inherently limited'.
Simon Davies, of Privacy International, a watchdog, said: 'If you correlate car tracking data with mobile phone data, which can also track people, there is the potential for an almost infallible surveillance system.' continues here
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