Ministers have launched a £11 million competition to help promote the development of carbon-cutting technologies in motor vehicles

The money is part of a £500 million package to support ultra-low emission vehicles (ULEVs) announced earlier this year.

Companies are being invited to pitch to Innovate UK (see link below), formerly known as the Technology Strategy Board, for investment in collaborative research and development projects.

The ULEV market has secured a foothold, but motorists remain sceptical because of the price of vehicles and the inconvenience of charging them up.

Transport minister Baroness Kramer said: “"By 2040 we expect virtually all new cars and vans to be using carbon-cutting technology and we want to see as much of this as possible designed and built here, in the UK, delivering economic as well as environmental benefits.”

Earlier this year, deputy prime minister Nick Clegg outlined how the government would spend £500 million building up infrastructure to support ULEVs which he said would underpin jobs and economic growth in the UK.

The money would include £100 million for industry-led research and development, he said.