Councils will be able to charge utility firms a maximum of £2,500 per day to dig up roads in a scheme aimed at reducing congestion.
The idea is that engineers will be forced to work more quickly and when the roads are less busy. Utility companies could be charged if they work during rush hours, when they cause the most inconvenience.
Local authorities can apply to join the pilot lane rental scheme which is to be tried in a city and two other areas.
The initiative was announced by Transport Minister Norman Baker who said the council involved would charge daily where works obstruct vehicles at the busiest times. But chances must be given for works promoters to avoid the fees by doing work at times which would bring less inconvenience.
The scheme would provide "a clear financial incentive for works to be carried out in less disruptive ways," he said, adding that the lane rental charges must focus on streets where there is the most disruption.
Copyright Press Association 2012