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Melbourne could soon be home to a congestion tax similar to that in London under a new plan backed by the Melbourne City Council.

The Age reports that a council proposal would see motorists taxed for every kilometre they drive instead of paying registration fees.

Prices would be higher during peak times and along routes where cars impact public transport, while trips would be discounted outside of those times. An e-tag device would record charges under the opt-in system.

The system would be similar to that in the US state of Oregon, where motorists are charged 1.7 US cents (2.3 cents) per mile.

‘I’m not saying it’s the solution, but I think it’s one of the things we should consider,’ the council’s transport chair Nicolas Frances Gilley said.

Both sides of parliament, however, said they had no interest in such a plan.

Shadow roads spokesperson David Hodgett told the Age he was more likely to ‘partner Dustin Martin in Richmond’s midfield’ than to impose such a tax.