The UK government will trial driverless cars in up to three cities from January next year.

Business Secretary Vince Cable today announced a £10 million competition that municipalities can bid for to host one of the trials. The government wants projects to be drawn up in collaboration with businesses and research firms; selected cities will host tests for 18 to 36 months.

“Today’s announcement will see driverless cars take to our streets in less than six months, putting us at the forefront of this transformational technology and opening up new opportunities for our economy and society,” Cable said.

The competition has been funded by the Department for Business, Innovation and Skills and the Department for Transport. The Technology Strategy Board is partnering the scheme and the government has said projects should be “business-led” and incorporate both tech firms and manufacturers. Applications for the £10 million driverless car fund are scheduled to close on October 1, 2014.

To ensure driverless cars are safely tested in the UK, ministers are launching a review into current road regulations and how they will affect the automotive technology. The investigation will examine both fully autonomous cars and those where a qualified driver can take control.

“Driverless cars have huge potential to transform the UK’s transport network – they could improve safety, reduce congestion and lower emissions, particularly CO2,” Transport Minister Claire Perry said. “We are determined to ensure driverless cars can fulfil this potential which is why we are actively reviewing regulatory obstacles to create the right framework for trialling these vehicles.”

The prize fund and review were both hinted at by the Treasury in December.

Google co-founder Sergey Brin unveiled the company’s latest self-driving car prototype, which offers no steering wheel, accelerator pedal or brake pedal, at the Code Conference in March. Google is planning a small pilot program for California “in the next couple of years.”

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