Britain lags far behind some other European countries in adopting new biofuel technology, according to Saab's UK chief.

The car company's managing director Jonathan Nash said stronger signals were needed from government to give confidence to motorists and other players in the emerging sector.

In Sweden, for example, he said new and refurbished filling stations were only given planning permission if they stocked E85, which is blended using 85% ethanol. As a result motorists could buy the fuel at more than 800 locations. In the UK it is only sold at 15 Morrisons filling stations.

Mr Nash said cars designed to run on E85 had a 20% increase in power and a 30% increase in torque over those running on conventional fuel, but could still use straight petrol where necessary. "People will be able to use cars with smaller engines."

Sales of Saab models with the technology had jumped to 85% of total output since they were launched in Sweden and Ireland, in under 12 months, he said.

"Consumers are prepared to make the "right" choices when offered the right tools, but the government has to offer a sustainable, long-term framework.

"LPG (liquid petroleum gas) was killed by government policy, it is now dead technology. There are no new cars built with original equipment for LPG," said Mr Nash.