The Department for Transport (DfT) will make it an offence to keep an uninsured vehicle - rather than just to drive when uninsured - making it easier to catch uninsured drivers and keep them off the roads.

Under the new system the DVLA will work in partnership with the insurance industry to identify uninsured vehicles and motorists will receive a letter telling them that their vehicle appears to be uninsured and warning them that they will be fined unless they insure it within a set period.

In addition, if the keeper fails to insure the vehicle they will be given a £100 fine and if the vehicle remains uninsured - regardless of whether the fine is paid - it could then be seized and destroyed.

"Each year uninsured and untraced drivers kill 160 people and injure 23,000, and uninsured driving costs law-abiding motorists more than £400m in extra premiums,” explained road safety minister Paul Clark.

"We've already taken action to force this irresponsible minority off the roads -increased police powers mean more than 400 uninsured vehicles are seized every day. But these tough new measures will catch anyone who is keeping an uninsured vehicle, leaving them with nowhere to hide."

Vehicles with a valid Statutory Off Road Notice (SORN) will not be required to be insured.

The Government has already given the police powers to seize and destroy vehicles being driven uninsured, along with improved access to the Motor Insurance Database to enhance their capability to detect uninsured driving by using Automatic Number Plate Recognition (ANPR) equipment.

Police removed around 150,000 vehicles in 2007 - more than 400 a day.