Firms will be charged £2,500 a day to dig up roads in 2012

Roadworks in London will be dramatically reduced under plans to charge firms up to £2,500 a day to rent traffic lanes.

Mayor Boris Johnson aims to introduce the levies on gas, water and cable TV companies next spring before the Olympics.

The lane rental regime will apply to about 200 miles, or nearly half, of the major roads in the capital.

"Lane rental will offer a powerful incentive for utility companies to ensure they complete their work as quickly as possible," said the Mayor.

Charges of £2,500 or £800 a day, depending on the severity of congestion caused and timing, will be enforced to make firms carry out works during quiet periods, including weekends, rather than rush hour.

Today Transport Secretary Philip Hammond announced a consultation on the charges, which companies will be able to avoid if they dig up roads when it causes the least disruption.

The Mayor is proposing that the £2,500 charge should apply for works carried out at "pinch points" between 7am and 8am Monday to Friday, and midday to 6pm at the weekend. The £800 levy would be for other parts of the network between 7am and 10am, and 3.30pm to 7pm Monday to Friday, and midday to 6pm at weekends.

The utility companies have fiercely opposed the new levies.