"SMART dust" could be used to keep track of vehicles as part of Government plans to replace the current car tax system.

Nanotechnology developed at Newcastle University could be built into cars and implanted in every lamppost or in white lines on the roads to keep constant tabs on vehicles.

The scheme may sound like science fiction, but full-scale trials are to begin this month in Newcastle, continuing until June.

University boffins say that the pinhead-sized devices would allow drivers to be charged according to how much they used their vehicles and how much they travel at busy times on congested roads. They could also help to curb pollution.

Professor of transport Phil Blythe, who is working on the scheme with Dr Alan Tully, of the computer science department, said: "The idea of replacing car tax is where the real excitment lies.

"Most European countries are looking for some sort of road user charge and the potential is massive.

"Newcastle is where this technology has been forged and it could really put the North-East on the map."