One of the UK's most congested highways, connecting the busy container port at Felixstowe to Birmingham, is to become Britain's first internet-connected road in a pilot project that could pave the way for everything from tolls to self-driving cars.

A network of sensors will be placed along a 50-mile stretch of the A14 in a collaboration between BT, the Department for Transport and the Cambridge start-up Neul, creating a smart road which can monitor traffic by sending signals to and from mobile phones in moving vehicles.

The technology, which sends signals over the white spaces between television channels instead of mobile phone networks, could even pave the way for government systems to automatically control car speeds.

The telecoms watchdog Ofcom, which on Wednesday approved the project as part of its new blueprint for how Britain will use spectrum, is already forecasting what high technology traffic systems will look like.

"Sensors in cars and on the roads monitor the build-up of congestions and wirelessly send this information to a central traffic control system, which automatically imposes variable speed limits that smooth the flow of traffic," Ofcom said. "This system could also communicate directly with cars, directing them along diverted routes to avoid the congestion and even managing their speed."

Onboard computers could essentially override the driver, imposing maximum speeds on the vehicle by controlling the brakes and the engine. While the concept may sound futuristic, Google is already developing a computer-driven car, which uses cameras, radar, and range finders to detect obstacles and other vehicles. The Google smart car has been extensively tested on public highways and smart roads lined with sensors.

The A14 project will not involve smart cars, but is a first step in building the infrastructure such vehicles will need. It could also lay the ground for charging motorists to use busy roads.

The Highways Agency is proposing a £1.5bn improvement to the A14 which would be paid for by a toll, with lorries paying up to £3 to use the improved route. The BT's sensor project could help design the toll and the road improvements. The project will initially gather information on car drivers before moving on to collect information on heavy goods vehicles. The information will be sent back to a database to which the Department for Transport will have access.

"Understanding traffic patterns, in different weather conditions at different times of day, will allow changes to traffic regulation," said Stan Boland, chief executive of Neul. "In the future it might provide data that could be used for road pricing, vehicle tracking, and breakdown."

Within one or two years, Boland believes the UK will have national, regional and city-wide networks of sensors, connected to simple tracking devices monitoring everything from whether council bins need emptying and which parking spaces are free to the location of missing pets.

While traffic data is already gathered by companies such as the satnav maker TomTom, using mobile phone networks, the A14 project offers a low-cost alternative. Instead of relying on mobile masts, which costs tens of thousands to install, Neul will use small base stations that cost a few pounds and can be fixed to street lamps or, in the case of the A14, the outside of nearby BT exchanges.

The project is one of a series approved by Ofcom to explore white space, which is currently used by cameras and microphones for films, theatres and live events but in many areas lies empty. In Glasgow, where consumer take-up of broadband is among the lowest in the country, Microsoft will be using the spectrum to install free wifi in the city centre. Working with the University of Strathclyde, the software group will install sensors around the city to measure pollution and humidity.

White space is also useful for getting broadband signals into rural areas, because it travels longer distances and through obstacles such as leaves and trees. On the Isle of Wight, an Ofcom-approved trial will get remote homes online.

Google is also taking part as one of a number of companies developing intelligent databases that could eventually allow smartphones and tablets to use white space to connect to the internet instead as an alternative to mobile signals.

The databases will tell devices which bands are empty in their local area, and at what power level the signal can safely operate without interfering with nearby users. Demand for data over wireless devices is forecast to be 80 times higher than it is today by 2030, and Ofcom is bent on increasing the amount of spectrum available to connect machines ranging from computers to parking meter sensors to the internet.