Gordon Brown has revealed he wants to make Britain "a world leader" in producing and exporting electric cars, hybrid petrol-electric vehicles and lighter cars using less petrol.
The prime minister made the claims in an interview with UK newspaper The Independent, saying that investing in green technology now would reap dividends in the future.
Brown revealed that Alistair Darling, the chancellor, will announce in his budget later this month that trials for electric cars in two or three cities will begin next year. Councils will be invited to bid to become Britain's first "green cities".
The government will open talks with power companies to ensure the vehicles can have their batteries recharged at a national network of power points at the roadside.
Brown said the push would enjoy widespread public support. "This is a job creator, a quality of life improver and an environment-enhancing measure," he said. "We want to harness a desire among people to be part of this. A better Britain means building a greener Britain."
He added that he would consider buying a fleet of electric cars for ministers to set an example.
To help Britain's struggling car industry, Brown said the Government was considering a scrappage scheme under which motorists would get up to £2000 for trading in a polluting older car for a cleaner new vehicle.
Darling will also set a target of creating 400,000 jobs in "green industries" over the next five years.