The US designed Terrafugia Transition flying car costs around 150,000 –85,000 cheaper than a Rolls Royce Phantom.

The Terrafugia works as a conventional car, with a perfectly respectable fuel consumption of 35mpg and a top speed of 65mph.

Once its wings are unfolded – with a span of 28 feet and six inches – it can fly at 115mph and consumes five gallons of fuel an hour.

According to Terrafugia, there is interest from British consumers who face a price tag of around ?150,000.

The two-seater Terrafugia Transition will require approval from the European Aviation Safety Agency before it can be used in Britain.

Anyone using it will need both a driving and pilots licence, said a spokesman for the Civil Aviation Authority.

A CAA spokesman downplayed the significance of the Terrafugia. “Flying cars have been around since the 1930s,” he said.

“They may work in the United States, where every small provincial town as an airfield. But that is not the case here, in any case distances are much shorter in the UK.”

At the same time the EU is investing ?4.2 million in a craft known as myCopter – a Personal Aerial Vehicle – capable of enabling commuters to fly over the traffic.