Road transport must face up to its contribution to global warming, says a newly published report by the Commons Transport Select Committee.

The committee calls for the Government to support the development and manufacture of cleaner, greener and safer cars. The MPs recommend more grants to help people buy the cleanest cars available. They also say tax levels should discourage people from buying the most polluting vehicles.

Gwyneth Dunwoody MP, chairman of the committee, says: "The technological potential is stunning. The Government must ensure that incentives encourage manufacturers to introduce cleaner technologies and safety systems in cars, which consumers are then encouraged to buy. The Government does not need to be prescriptive; the car industry is capable of bringing forward the best solution. The UK must not miss the opportunity to have cars on our roads within the next decade that prevent someone driving if they are drunk, uninsured or untaxed."

The MPs say the Government should not be afraid to legislate to meet environmental targets that are now way off track, because past experience shows that stringent rules can drive major technological improvements. They say the Government has invested "trivial" amounts in developing low carbon technologies, an area that should be a major commercial opportunity for the UK.

The report 'Cars of the Future" suggests that the 'dream ticket' of zero emission vehicles might be the fuel cell car powered by hydrogen from renewable sources. This may be decades away, but is being actively developed. Existing technologies such as biofuels and hybrid cars should also be encouraged. Large-scale fleet demonstrations of low carbon cars could boost fuelling infrastructure, as well as technology development.

The report says the Government must do more to ensure that industry designs cars which reduce the potential for car crime and casualties before they occur. The MPs say the UK cars of the future could also prevent a driver from speeding, tailgatmg, drifting across lanes or losing control on comers. This technology needs a lot of care and research to make it work well, and Britain must take a lead on bringing these life-saving developments - many already at demonstration stage - into the mainstream. Some new technologies raise legal issues which must be resolved.

Society of Motor Manufacturers and Traders' chief executive Christopher Macgowan says: "The report recognises the 'great steps' the automotive industry has taken to address the important issues of safety and environmental performance.

"Government must take a lead in stimulating further R&D to maximise the UK'scompetitive advantage in the supply of new technology to global automotive markets.

"By leading the way in developing new technologies and minimising environmental impact, the motor industry is helping to make road transport more sustainable. Government must now heed the Committee's call to show greater leadership in creating the infrastructure, financial and legal frameworks to allow these new technologies to benefit all road users."