The UK government on Wednesday became the first country to announce that it will regulate the use of self-driving vehicles at slow speeds on motorways, with the first possibly appearing on public roads this year.
Britain's Transport Ministry said it was working on specific wording to update the country's highway code for the safe use of self-driving vehicle systems.
It will start with automated lane-keeping systems, which use sensors and software to keep cars within a lane, allowing them to accelerate and brake without driver input.
The government said the use of the systems would be restricted to motorways, at speeds under 60kph.
The UK government wants to be at the forefront of introducing autonomous driving technology and the Transport Ministry forecasts that by 2035, about 40 per cent of new UK cars could have self-driving capabilities, creating up to 38,000 new skilled jobs.
"The automotive industry welcomes this vital step to permit the use of automated vehicles on UK roads, which will put Britain in the vanguard of road safety and automotive technology," said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders.
But insurance companies said that Britain's goal of being a leader in adopting self-driving cars could backfire unless car makers and regulators spell out the limits of the technology available today.
They say calling the system automated or using the term self-driving will confuse British drivers into thinking the cars can drive themselves, causing accidents and risking a public backlash.
"By calling [automated lane keeping systems] automated our concern also is that the UK government is contributing to the confusion and frequent misuse of assisted driving systems that have unfortunately already led to many tragic deaths," said Matthew Avery, research director at Thatcham Research, which tested the systems.
The dangers of drivers misunderstanding the limits of technology is an issue in the US, where regulators are reviewing about 20 crashes involving Tesla's driver-assistance tools, such as its autopilot system.