UK Chancellor of the Exchequer George Osborne has earmarked £100m funding for carrying out research and development of automated cars and its supporting systems during the next five years.

The funding will be matched by the amount contributed by the auto industry, which will be made available to companies that are looking for finance specific areas of research.

According to reports, every funding round will concentrate on a specific area of how driverless cars interact with each other, transport system and the environment around them.

The projects are likely to attract non-automotive companies including IT, telecoms and infrastructure, reported The Telegraph.

University of Oxford will also receive £5m from the government for further research into autonomous vehicles.

UK Business Secretary Vince Cable said: "Britain has a long history of transport innovation and is now home to a diverse and dynamic automotive sector.

"Today's £200m investment will ensure the UK stays at the cutting-edge and is well placed to profit from the growing market for hi-tech vehicles of the future."

Previously, Osborne said that the UK government was doubling the amount dedicated towards research into autonomous vehicles to £19m and revealed the four UK locations where testing for the next generation vehicles will be conducted.

According to UK government estimate driverless car sector is likely to be worth £900bn a year globally by 2025.