Ken Livingstone hopes to cut traffic by 15%

This would involve setting up a cordon of about 230 video camera systems able to spot and read car number plates. The car numbers will be checked against a central database to check fees have been paid.

On Thursday, Colt Telecom announced it had been awarded the multi-million pound contract to provide the high-speed data network that will make the system possible.

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The deal is worth at least �15m over a minimum of five years, and is due to go live early next year, Colt said.

The system will use technology developed by Colt to send large numbers of pictures simultaneously to a number of centres across London, where details will be checked.

With about 40,000 vehicles an hour driving into the toll zone, the network will have to be able to cope with high volumes.

Mr Livingstone hopes the scheme will raise �150m a year, which will go towards improving public transport

Critics of the scheme say it will unfairly penalise commercial vehicles that need to move in and out of the charge zone several times a day.

The chairman of the London policy unit of the Federation of Small Businesses, Richard Morse, has described the scheme as an "annual �1,200 'poll tax'" on London's businesses.

It has yet to gain government backing, with a final decision expected later in March.

Other European cities are expected to take a keen interest in how the scheme works, with a view to introducing it if it proves successful.

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