Driverless LUTZ Pathfinder shares streets of Buckinghamshire town with cyclists and pedestrians, reaching speeds of 15mph.
A driverless car has been tested for the first time on UK streets in the latest development in self-driving technology in Britain.
The trial saw a two-seater LUTZ Pathfinder travel 1.25 miles (2km) through pedestrianised areas of Milton Keynes, reaching speeds of up to 15mph while having to cope with walkers and cyclists for the first time. A driver was on board to take over in case of emergency.
The cars, built by Transport Systems Catapult (TSC), used virtual maps of the Buckinghamshire town to navigate the area around the train station and business district.
Google and Uber have tested autonomous vehicles on American roads, butprevious UK trials have involved a human manually operating the vehicle.
Although fully automated cars are not expected to be in use in the UK for about 10 years, the government is keen to ensure that Britain is at the forefront of developing driverless technology.
Earlier this year, ministers launched a consultation on changes to motor insurance rules and the highway code. This is aimed at allowing self-driving cars to be on the roads by 2020.
The business secretary, Greg Clark, said: “The global market for autonomous vehicles presents huge opportunities for our automotive and technology firms.
“The research that underpins the technology and software will have applications way beyond autonomous vehicles.”
A computer on board the vehicle senses the surrounding environment with cameras and lidar, a similar system to radar that uses light from a laser, to avoid accidents.
The demonstration marks the end of 18 months of development by TSC, a not-for-profit research organisation funded by a combination of public money and private sector investment.
TSC said the Milton Keynes trial had been a success and the vehicles had operated as expected.
The test was also designed to gauge the public reaction to the technology and begin work on the regulatory architecture that will govern autonomous vehicles.
TSC said it had worked with Milton Keynes council on safety planning and hoped that the trial showed driverless vehicles could be used for transportation in other towns.
“Driverless vehicles are coming to Britain and what we have demonstrated today is a huge step on that journey,” said Neil Fulton, the TSC programme director.
He said successful tests in Milton Keynes would pave the way for further research and trials participated in by UK universities and small businesses.
The software in charge of the vehicle, Selenium, was developed by scientists, mathematicians and engineers from the Oxford Robotics Institute, through a company called Oxbotica.
Driverless car tests have had mixed results in the US, where the technology is further developed than in the UK.
Uber has raced ahead of its competitors, deploying Ford Fusions in Pittsburgh, Pennsylvania, which do not require hands on the wheel, as part of the company’s regular taxi service.
It is also developing a driverless car in partnership with Swedish carmaker Volvo.
But electric car company Tesla raised concerns about the implications of driverless vehicles in May, after one of its cars using autopilot mode was involved in a fatal crash.
Last month, a Google self-driving car collided with another vehicle after the latter ran through a red light.
Ministers want the UK to be a world leader in the driverless vehicle market, whichcould be worth £900bn by 2025, according to a KPMG study.
In the budget in March, the then chancellor George Osborne said self-driving cars could be tested on British motorways next year.