A historic city which introduced Britain's first congestion charge could extend the scheme to drive traffic out of its jammed centre, a council leader said today.

A £2 charge was introduced three years ago for motorists entering a medieval street in Durham on the approach to its much-loved cathedral and castle.

The scheme, which preceded London's congestion charge by five months, has been seen as a success and has reduced traffic levels on narrow Saddler Street by 85% and increased pedestrian use by 10%.

Now council planners have applied for government funding to study bringing in more charges to tackle the problem of traffic passing through Durham city centre.

Plans for a centre by-pass have not been realised and its roads are often clogged up with through traffic which has no alternative route. Durham County Council highway chiefs said extending the congestion charge would be part of a package of traffic and transport schemes to manage the problem.

Council leader Ken Manton said it was ''essential'' for Durham's viability that the problem was tackled.

''Congestion charging could be the important tool that allows us to produce a truly efficient and inclusive transport network and allows continued quality of life.''

He said cash for a feasibility study would be used to gain public acceptance for it, and to reassure people it was not simply a money-making exercise for the council.

He added: ''It is equally important for people to know that we are currently looking to investigate possibilities rather than firm-up proposals, and that those investigations will include the fullest possible public consultation.''

The council has applied to the Transport Innovation Fund for half of the £600,000 study which would look at two proposals.

The council could bring in a single toll on the A690, which passes through the centre, with alternative routes introduced.

It will also investigate introducing a congestion zone, similar to London's, around the city centre, with better park and ride facilities and public transport as the pay-off.

Mr Manton said: ''If our bid is successful, it will help us to review whether a viable and practical scheme can be developed and explain which of the two options would bring the greatest benefits to the people of Durham.''

He said the findings could help other gridlocked cities.

''If we can continue to show we are willing and able to successfully tackle those problems by introducing radical and innovative solutions such as congestion charging, it could create the way forward for historic towns throughout the rest of the country,'' he said.