Bradford Council is being encouraged to slap a car parking levy on businesses in return for extra cash.

The controversial plan unveiled by Transport Minister Rosie Winterton would mean town halls would no longer need the approval of Transport Secretary Ruth Kelly to impose the charges as an alternative to pay-as-you-drive road pricing.

The scheme was part of a package of measures proposed in the Local Transport Bill where she revealed that more cash would be available for councils to sort out their travel problems if they considered imposing the controversial financial penalties on companies.

She insisted that local authorities were not being bribed into accepting unpopular schemes but they had to show "demand management" to secure cash from the Transport Innovation Fund. She said there was nothing unusual about wanting to encourage local innovation and come forward with ideas.

Mrs Winterton said: "Workplace parking measures can be part of demand management.

"If that is what local authorities feel is right for their areas, then obviously we look at what they are proposing.

"We want to encourage innovation and we have made very clear there is no national road pricing scheme, certainly through this Bill we have made clear we want a debate on it and we want to look at local ideas on it. I do not think it is blackmail, we are saying we have this fund here which is specifically set up to be innovative."

Bradford Chamber fears the move could have an impact on the economy in all sectors.

Chief executive Sandy Needham said either businesses could charge employees or pay the tax themselves and raise the money through increased prices, so as not to lose profit.

She said: "Everyone, regardless of sector or location, will be affected.

Essentially companies may also have to pay twice with some smaller businesses renting car park spaces from other companies, only to have to pay again.

"A thing that has not been thought about is shift working. People will not want to walk distances at night or early in the morning and that flexibility was be affected."

Cash raised from schemes such as workplace parking charges or congestion charging would have to be pumped straight back into improving transport in the area where charges are imposed.

The Bill also includes plans to appoint a trouble-shooter to overhaul bus services. Extra powers will also be granted to councils to impose "quality contracts" on bus operators inviting them to tender for the contracts which would set limits on fares, punctuality and frequency of services.

But it did not include powers for a national road pricing scheme. The Government has so far received only two positive proposals for congestion charging, from Manchester and Cambridge, despite giving taxpayers' cash to ten areas to come up with demand management projects.