Driverless cars will be tested on public roads after the government gave the green light this morning.
Transport minister Claire Perry said the experiment positioned the UK to attract investment from the emerging industry.
Her announcement came alongside publication of a Department for Transport review into the best ways to trial automated vehicles.
At this stage, the cars will have people ready to control them if necessary – but the review also considered the implications of testing fully automated vehicles in the future.
Perry - who once described driverless cars as “a bit weird” - said this morning: “Driverless cars are the future.
“I want Britain to be at the forefront of this exciting new development, to embrace a technology that could transform our roads and open up a brand new route for global investment.
“These are still early days but today is an important step. The trials present a fantastic opportunity for this country to take a lead internationally in the development of this new technology.”
A prototype of a driverless pod that will be tested in public areas in Milton Keynes was unveiled this morning.
Other trials will take place in Bristol, Greenwich and Coventry.
The Arup-led UK Autodrive consortium will be undertaking driverless car trials in Milton Keynes and Coventry. The £19.2m programme aims to demonstrate the uses of the technology.
Project director Tim Armitage said: “This government review of regulations paves the way for the introduction of driverless vehicles on UK roads. UK Autodrive will make use of these changes to lead the development and adoption of autonomous driving technologies.
“The three year programme will demonstrate those autonomous technologies in the cities of Milton Keynes and Coventry, positioning the UK as a leader in this domain.”
Business secretary Vince Cable added that the trials represented a massive opportunity for the manufacturing sector.
He said: “The UK is at the cutting edge of automotive technology - from the all-electric cars built in Sunderland, to the formula 1 expertise in the Midlands.
“It’s important for jobs, growth and society that we keep at the forefront of innovation, that’s why I launched a competition to research and develop driverless cars. The projects we are now funding in Greenwich, Bristol, Milton Keynes and Coventry will help to ensure we are world-leaders in this field and able to benefit from what is expected to be a £900bn industry by 2025.
“The government’s industrial strategy is backing the automotive sector as it goes from strength to strength. We are giving business the confidence to invest over the long term and developing cutting-edge technology that will create high skilled jobs.”