Household rubbish from millions of British homes is to be used as a cheap and "green" fuel to power family cars, the world‘‘s biggest car-maker has announced, according to the Daily Mail General Motors, which owns Britain‘‘s Vauxhall as well as Sweden‘‘s Saab, is backing a new system to create the bio-fuel from garbage - instead of having to grow it in the form of grain.

Instead of going to the local tip, rubbish-bin collections could be taken to special reprocessing plants where organic waste can be extracted and processed using special micro-organisms or "bugs" that turn it into ethanol fuel - a form of alcohol.

It will cost just 50p a gallon to produce the organic fuel under a tie-up deal between General Motors and a Chicago-based US bio-tech company called Coskata.

It will also and reduce dependency on oil which re cently soared above $100 a barrel, says the car giant.

A pilot plant is to open before the end of this year with a plant capable of producing up to 100million gallons a year up and running by 2011.

General Motors chairman Rick Wagoner said at the Detroit Motor Show where the new initiative was announced:" Coskata expects to be able to replicate this process almost anywhere in the world because it can use almost any source material - including agricultural waste, municipal waste, discarded plastics, and even old tyres."

Britain was part of an "aggressive ramp up plan" that would "revolutionise" fuel for cars, he said.

Millions of cars which run on bio-fuel already exist - including a range of Saabs - and are being driven now by customers including Sir Richard Branson who has been a big supporter of the alternative fuel.

Supercar maker Ferrari stunned the motor show by itself unveiling a prototype model that runs on ethano l.

Ferrari chief executive Amedeo Felisa said the sleek Ferrari F430 Spider Biofuel, with green stripes on its silver bodywork, was part of the firm‘‘s efforts to exhaust emission levels by 40 percent by 2012.

It was a spin-off of Formula 1 technology developed to comply with F1 rules that require race fuel to have a 5.75 per cent bio-fuel content.

The alcohol - called bio-ethanol - can be created from a range of vegetation including crops such as sugar cane, sugar beet and oil seed rape, or from forest clippings.

But environmental campaigners who once backed the idea of bio-fuels have, in recent times, attacked the strategy on the grounds that vast tracts of land used for food production will be taken up growing fuel for cars - causing food prices to soar and risking global food shortages.

Using household waste gets around this problem.

And with British householders facing the prospect of controversial "pay-as -you-throw" council taxes for rubbish collection, the idea could massively reduce costs. Oil is itself a carbon-based organic fuel, formed from crushed animals and vegetation over millions of years. With little adaptation, cars can also run off alcohol or ethanol from sugar-beet or wood chip, and even vegetable oil. But this again is grown.

Independent scientific tests have shown that the process will produce nearly eight times the amount of energy that is taken up extracting the fuel.

General Motors‘‘ Mr Wagoner said:" Coskata has developed a proprietary process to produce ethanol at a projected cost of less than one dollar (50p) per gallon". His company and other car makers have developed cars that run off ethanol, a blend of 85 per cent ethanol and 15 per cent petrol, or that can switch between petrol and ethanol - so called "flex" for flexibility cars.

More than 6 million are already running in the United States alone with Sir Richard Bran son being the most high-profile owner in the UK. Mr Wagone