The maximum cost of a disabled Blue Badge permit is to be set at £10 under changes announced by the Government.
Alongside the five-fold rise in charges - the first in 30 years - the Government is introducing new measures to combat abuse of the parking scheme, transport minister Norman Baker said.
The scheme will also be extended to severely disabled members of the armed forces, war veterans and to more disabled children under three. Local authorities will have the power to seize badges which have been misused or cancelled.
Mr Baker said abuse of the system cost about £46 million a year and said genuine badge-holders can find it difficult to get a parking space. He said the changes would modernise the system, extend eligibility and crack down on misuse of badges.
He said: "The Blue Badge Scheme makes a real difference to millions of disabled people every day. However, it is clear that it is in real need of modernisation after 40 years without major reform."
The Government is still considering whether to extend the scheme to those with temporary disabilities lasting less than a year, pending the outcome of research.
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