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Driverless cars that can hit speeds of 12mph will be gliding along pavements and using sensors to avoid hitting pedestrians by 2015.

GPS technology will enable the battery-driven two-person “pods” to steer round objects, people and each other.

Business Secretary Vince Cable said: “The number of cars in the world is expected to reach four billion by 2050, four times today’s number, so it is important that the UK is at the cutting edge of new technologies.

“Driverless cars have 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 £2-a-trip pods will be hailed and paid for via a mobile phone app.

David Willetts, the minister for higher education at the business department, said the scheme was part of a "science fiction future".

He added: “In 25 years we will look back and be amazed at how much time we used to waste driving ourselves places.

“We will be hopping into a car that will drive us to the cinema where we will tell it ‘park yourself and come back and get me at 10.15pm.’

“One aim is to see if driverless cars are safer so we can cut road traffic accidents. They don’t get drunk or drive under the influence of drugs. They don't get exhausted and fall asleep.”

Google introduced driverless cars in California last year and they have now driven 400,000 miles in America without a single accident

A £65million trial of the cars in Milton Keynes, Bucks, starts in 2015. The 100-strong fleet is expected to be fully operational two years later.