A prototype is expected in 2005
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Scientists at Bath University are designing a hydraulic tilting chassis to make a tilting three-wheeled car stable at high speeds.
The vehicle is being developed by a team of European scientists and is designed to be driven in cities.
It aims to combine the safety of a car with the manoeuvrability of a motorbike, and a top speed of 50mph.
Jos Darling from the university, said the vehicle marked a "tremendous leap forward" in technology
The Clever (Compact Low Emission Vehicle for Urban Transport) will be one metre wide and would cost around £6,500 if it went into production.
It is claimed that it will be more fuel-efficient and less polluting than other vehicles.
'Increased traffic'
The vehicle is fully enclosed in a metal framework and its roof is as high as conventional cars. It would carry one
passenger, sitting behind the driver.
Mr Darling added: "The increase in traffic in our towns and cities means that we have to find a way to make our vehicles smaller.
"The advent of micro cars is a sign of this, but with its manoeuvrability and small width, the Clever vehicle is the ultimate in the search for a small vehicle to get around cities like Bath, Bristol and London in."
Because it does not run on petrol or diesel, it
would not be liable for the congestion charge in London, or any other city where the charge could be adopted.
The £1.5m project is funded by the European Union and began in December 2002.
A prototype of the car is expected to be built by December 2005.