Driverless cars will transport people through the streets of a British town in a £1.5 million project aimed at boosting green technology.
From 2015 an initial batch of 20 driver-operated "pods", which will be able to carry two people, will be run on designated pathways separated from pedestrians in Milton Keynes.
But by mid-2017 it is planned that 100 fully autonomous vehicles will run on pathways alongside people, using sensors to avoid collisions with obstacles.
The early collaborators on the project are engineering consultancy firm Arup, Transport Systems Catapult, the Automotive Council, and Cambridge and Oxford Universities.
John Miles, programme director and Arup Consultant, said: "With the continually increasing number of people living in cities, city authorities are facing some real challenges with regards to ensuring future levels of mobility.
"This project has the potential to deliver a truly autonomous low-carbon transport option within the context of a city centre and we're delighted to be using this funding to take the project into the first stages of design."
The scheme was announced by Business Secretary Vince Cable, along with a £75 million fund to produce and test low-carbon engines.
They will be the pilot projects of the Advanced Propulsion Centre and will channel £1 billion of investment from Government and industry to fund the development of new technologies over the next 10 years.
Mr 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.
"The car industry has gone from strength to strength - with one vehicle rolling off a production line somewhere in the UK every 20 seconds. But we must look at the long-term challenges and opportunities to ensure the sector continues to succeed and grow."