Transport Secretary Norman Baker revealed the cash would be used to promote the organisations, which give people the chance to rent low carbon vehicles for a short period of time on a pay-as-you-go basis.

Ministers believe such initiatives are ideal for people who need to use a car occasionally but don’t need or want to buy their own vehicle. As the low carbon cars churn out less pollution than standard models, they can also help to cut carbon emissions.

Research shows that car clubs have grown in popularity over the past few years, with membership rising from just 22,000 back in 2007 to its current total of more than 127,000.

Mr Baker said:

“The figures speak for themselves – each car club vehicle can result in taking 24 private vehicles off the road and the lower carbon vehicles typically emit approximately 33% less CO2 than the average car.”

The funding fillip has been backed by Carplus, a national charity looking to increase the use of car clubs.

Antonia Roberts, the group’s director, said:

“£40,000 may seem like a relatively small amount of funding but it has huge significance in this period of reduced spending.

“The announcement signifies valuable support for car clubs, which can save individuals, businesses and local authorities money, reduce emissions and support sustainable transport objectives.”

Carplus has recently received a further £57,000 from Transport for London to roll out car clubs across London, an idea welcomed by the capital’s Mayor Boris Johnson, who said:

“Car clubs are a brilliant idea and membership is booming in the capital. Our focus now is to increase membership in the capital’s outer boroughs and I welcome all extra support for these cracking clubs, which are becoming indispensible to their thousands of members.”

For further information about Car Clubs, visit the Carplus website (opens a new window)