The data is also picked up by detectors at the roadside and mobile phone towers. That enables the road to communicate with cars, allowing for “intelligent” traffic lights to turn green when cars are approaching or gantries on the motorway to announce changes to speed limits.

Data will also be sent to “control centres” that manage traffic, enabling a vastly improved system to monitor and even direct vehicles.

“A traffic controller will know where all vehicles are and even where they are headed,” said Kompfner. “That would result in a significant reduction in congestion and replace the need for cameras.”

Although the plan is to initially introduce the technology on a voluntary basis, Kompfner conceded that for the system to work it would need widespread uptake. He envisages governments making the technology mandatory for safety reasons.Any system that tracks cars could also be used for speed enforcement or national road tolling.

Roads in the UK are already subject to the closest surveillance of any in the world. Police control a database that is fed information from automatic number plate recognition (ANPR) cameras, and are able to deduce the journeys of as many as 10 million drivers a day. Details are stored for up to five years.

However, the government has been told that ANPR speed camera technology is “inherently limited” with “numerous shortcomings”.

Advice to ministers obtained by the Guardian under the Freedom of Information Act advocates upgrading to a more effective car tracking-based system, similar to CVIS technology, but warns such a system could be seen as a “spy in the cab” and “may be regarded as draconian”.

Introducing a more benign technology first, the report by transport consultants argues, would “enable potential adverse public reaction to be better managed”.

Simon Davies, director of the watchdog Privacy International, said: “The problem is not what the data tells the state, but what happens with interlocking information it already has. If you correlate car tracking data with mobile phone data, which can also track people, there is the potential for an almost infallible surveillance system.”

guardian.co.uk