A blow has been struck for pedestrians, cyclists and motorists

Lib Dem spokesman Tom Brake

Regulations introduced in April already mean gas, electricity, water and cable companies can be charged £2,000 for every day they overshoot agreed deadlines.

The new charges - to be piloted in Camden Town, north London, and Middlesbrough, Teeside - would go further in an effort to cut down on roadworks that cost British business an estimated £2bn a year.

Cost of delays

The figure, from a Transport Research Laboratory Study, includes the expense caused by traffic delays, accidents and damage to roads.

Mr Spellar said: "As you go around London you can see a whole number of roadworks with nobody working on them. Now that's just bad planning and bad scheduling.

Spellar launched the pilot on Tuesday

"But the people who really suffer are the travelling public, and of course the rest of us with the fumes from congestion."

He continued: "It's also reflecting the views of many shopkeepers, who see schemes that take far too long and severely disrupt their trade."

Local councils will keep the money generated from the new charges.

Cash to councils

Utilities have to repair the roads to agreed standards when they finish the work but highway authority chiefs complain that even newly resurfaced roads are weakened.

But Mr Spellar said the revenue aspect was a marginal part of the plans.

"The big issue here is actually making sure that we get the roadworks, which after all are often performing a necessary role, we get them in quickly and we get them out quickly."

About 40,000 holes are dug every year in London's roads alone.

And some streets have been especially hard hit - Aldgate High Street was dug up 47 times in one 12-month period.

The pilot projects are being run in parallel to a review of the penalties for over-running deadlines.

Dispute over plans

Motoring research group the RAC Foundation said it had been pressing for the "lane rental" scheme for the past four years.

A foundation spokesman said: "We think it's absolutely the right way to go. Utility companies are causing massive amounts of inconvenience for people of London and throughout the country."

Waterson: Utilities should be charged

But utility companies say the charges will be passed to the customers, who want the repair work done.

Irene Elsom, from the National Joint Utilities Group, said: "Our view is that this is just a tax on the utilities for carrying out their duties, for supplying us with essential services.

"We think it's entirely unjustified and as a means of reducing congestion and disruption it will not work."

Cross-party support

Conservative transport spokesman Nigel Waterson welcomed the government plans, which he said his party had urged for the last two years.

"Motorists are taxed a fortune to use the road and it is only right that utilities firms should be charged for taking up road space," he added.

The move was also welcomed by Liberal Democrat transport spokesman Tom Brake, who said: "A blow has been struck for pedestrians, cyclists and motorists...

"This should reduce the piles of rubble and traffic cones which litter our road sides."