Ministers are set to back legislation which would force utility companies to apply for permits to dig up roads and face heavy penalties when work overruns.

Under the legislation, which is aimed at reducing traffic jams caused by roadworks, builders who block lanes with scaffolding and skips will also have to pay a charge for the congestion they create.

The Traffic Management Bill will replicate the system used in New York under which utility companies must apply for permits giving them precise start and end dates for their work.

Permits will not be granted if another road in the area, which might act as a diversion, is already being dug up. The rates of fines payable, which have not changed for a decade, will also be sharply increased.