Driverless cars will be permitted to take to the roads in four locations around Britain next month, it was confirmed yesterday, as George Osborne announced a boost in research funding.

People in Bristol, Milton Keynes, Coventry and Greenwich, southeast London, can expect to see them being tested from January 1.

Funding for three trial projects — Gateway, Venturer and UK Autodrive — was announced by the chancellor yesterday. The government has provided another £9 million for the trials, which will take between 18 and 36 months to complete, increasing the overall budget to £19 million.

Experts at Innovate UK, the government agency charged with accelerating economic growth, hope the research will increase understanding of the technology. The departments for transport and business, innovation and skills have each committed £2.75 million of fresh spending for the project, with the Treasury putting up a further £3.5 million for its budget.

Nick Jones, Innovate UK’s lead technologist, said driverless cars would trigger “the most significant transformation in road travel since the introduction of the internal combustion engine”.

Britain has a head start over some of its European competitors in the field, who are restricted from road testing the technology for the next three years by the Vienna Convention on Road Traffic. It is estimated that the autonomous transport industry will be worth £900 billion before 2025.