The economies of other cities like Nottingham would be boosted by charging larger firms to allow their staff to park at work, its councillors have been warned.
The city authority wants to tax its largest companies for every parking space they provide employees as a way of raising funds to improve public transport.
But business leaders in Nottingham have warned that if the proposals are approved by the Department for Transport in the coming weeks, they will hit the city's economy hard.
From 2010, Nottingham City Council plans to charge firms £180 a year for every parking space they provide their staff, with the fee rising to £350 in 2014.
The city council will announce the plans at the Financing the Future of Local Government conference in the Inmarsat Conference Centre, London.
Councillor Jane Urquhart, who is in charge of transport at the authority, will tell delegates that traffic congestion currently costs the city's economy £160 million a year.
She will say the council plans to spend the millions it raises through the Work-Place Parking Levy on new tram routes, the refurbishment of its train station and new bus routes.
Business leaders in Nottingham have warned the tax could be introduced in other cities.
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