There were 3,421 fatalities in 1998, giving Britain a lower road death rate than any other industrialised country.

Now transport minister Lord Whitty plans further measures to reduce casualties this autumn, including new speed limits and improved driving standards.

Lord Whitty said the 5% fall in overall fatal and serious injuries last year showed that "substantial progress was being made".

But the number of slight injuries remains 16% above the government's target and overall injuries recorded are 1% above the year 2000 target figure.

But the number of children killed and seriously injured in accidents fell 6% last year.

Lord Whitty said he was pleased with this reduction, but it remained an area in which Britain lagged behind the rest of Europe.

He added: "Later this year we intend to publish our new, comprehensive strategy to reduce casualties still further over the next 10 years.

"That strategy will cover driving standards, speed limits, infrastructure, vehicle design, pedestrian protection, cycling and motorcycle safety, as well as enforcement and penalties and publicity and education."

Statistics also showed that fewer people were caught drink-driving last year, despite a record number of breath tests.

Out of 815,500 drivers breathalised, 94,700 were either over the limit or refused to take a test.

That compares to 103,500 positive results out of 800,300 tests carried out in 1997.

The figures mean the proportion of drivers caught over the limit fell by 1% to about 12%.