Transport for London (TfL) will next month begin trials of a system that could replace the current congestion charge technology for regular commuters driving into the capital.

If tests prove successful, the tag and beacon vehicle detection system could replace the camera-based automatic number plate recognition technology when the city's congestion charge contract with Capita expires in 2009.

TfL last week appointed two companies, Norwegian technology firm Q-Free and Austrian-based Kapsch TrafficCom, to test the new system in the London borough of Southwark.

Starting in August, more than 100 vehicles will be used to test the accuracy of the tag and beacon technology, which is already used on many toll-roads across Europe, including the M6 Toll in the Midlands.

Trial vehicles will have a credit card-sized tag fitted to their windscreen. The tags will be detected using infrared communications when they pass one of 20 roadside beacons in Southwark.

'We believe that tag and beacon will be more accurate than the cameras that we use, which have a detection rate of about 70 per cent for a single pass of the vehicle,' said a TfL spokesman. 'In comparison, the system we are testing has a detection rate of 99.5 per cent for a single pass.'

By improving vehicle detection rates, the technology could also help the transport body introduce an account-based charging system for commuters.

'It would allow for a far more flexible road congestion scheme. The congestion charge contract runs out in 2009, with the retendering process starting next year. If successful, we would like to see tag and beacon as part of the new contract,' said the spokesman.

Paul Watters, head of road and transport policy at The AA Motoring Trust believes the system could reduce errors and make congestion charging more 'user friendly'.

'The current system is very unwieldy. Tag and beacon, if it was account-based, could reduce the risk of drivers forgetting they are entering the congestion zone and incurring penalties,' he said.

Tag and beacon may have to run in parallel with the current system as it would be impractical to apply it to occasional visitors to London, says Watters.

TfL has ruled out the use of global positioning and GSM systems for the 2009 contract renewal, saying that the technologies will remain unaffordable in the next decade.