The Morgan Aero 8 GT has achieved success at last year's British GT

The Morgan Motor Company, based in Malvern Links, Worcestershire, will spend two-and-a-half years working on a hydrogen-powered racing vehicle.

It will be powered by a fuel cell which converts hydrogen into electricity and produces only water vapour.

Energy and design experts are working with the firm on the �1.9m project.

'Performance not compromised'

A spokesman for the project told BBC News there had never before been a hydrogen- powered sports car.

He said: "When people think of 'green' cars they sigh inwardly and think of bubble cars or odd-shaped vehicles."

But he said in this instance there would be "no major compromise on performance".

He said after a prototype had been built the company wanted to find a partner to help make the car become commercially available.

Project director Charles Morgan, from the Morgan firm, said the LIFECar would be based on the Morgan Aero Eight.

'Energy revolution'

He said: "LIFECar promises to combine advanced technology while retaining the best in traditional ways of designing and building cars."

The project is part-funded by the Department for Trade and Industry (DTI).

Defence technology firm QinetiQ, gases group BOC and designers OSCar, as well as researchers from Cranfield and Oxford universities, are also involved.

Ian Whiting, of QinetiQ, said: "LIFECar is about catching the first big wave in the energy revolution, which is set to transform the motoring industry in the same way that the computer industry was transformed by the personal computer decades ago."