Winding its way between Durham's Norman cathedral and medieval university colleges, Saddler Street is more of an alley than a road. But the ancient cul-de-sac will this week become a battleground for motorists, libertarians, and environmentalists.

From 10am on Tuesday, vehicles will have to pay £2 to use the street, which is the only means of access to Durham's ancient central peninsula, surrounded on three sides by the river Wear.

The toll is Britain's first congestion charge for use of a public road, introduced by Durham's Labour-controlled county council under powers in the Transport Act 2000. A controversial move, it has infuriated traders, aggravated academics, and divided shoppers. Its reception will be scrutinised by 35 other towns and cities that have shown an interest in similar schemes.

The charge is intended to put an end to what the council describes as the Durham "kiss and run". Locals have a habit of dropping off a passenger to withdraw cash from a bank, then driving round the peninsula and picking them up on the way out. The manouevre avoids parking charges.

Chris Tunstall, the council's director of environmental services, said that half the 3,000 cars entering Saddler Street each day reappeared fewer than 15 minutes later. "I don't want those cars to be there. The road is very narrow - there are a lot of historic buildings. There is a real issue of the environment for pedestrians."

After 15 accidents in five years and regular tantrums inspired by traffic jams, the council considered pedestrianising the area. Mr Tunstall says this was judged impractical for local businesses and Durham University.

"It's the centre of Durham. But it"s also a working area," he said. "People ask me about the rights of those 1,500 car drivers. But what about the rights of the 15,000 pedestrians who go down there every day?"

Proceeds from the charge will fund two park-and-ride buses, together with buggies for the disabled. The council expects to break even, covering costs of £120,000 a year.

Motoring organisations said that the Durham scheme was the tip of the iceberg - similar initiatives are in the pipeline in Bristol and Edinburgh, not to mention London mayor Ken Livingstone's £5-a-day charge to enter the capital's centre from February. Edmund King, executive director of the RAC Foundation, said that drivers must prepare themselves for change. "We understand in theory that we can't go on with increasing congestion in city centres."

Spearheaded by the deputy prime minister, John Prescott, the new legislation allows councils to levy a charge as long as they spend the proceeds on improving local transport.

Durham's plans have been grudgingly accepted by the AA and the RAC Foundation, partly because the scheme is on a tiny scale. But Mr Living stone's plans for London are getting a rougher ride, due to the mayor's vagueness about the use of the proceeds.

After London, the next to act is likely to be Derbyshire; it wants to charge for an access road to the Derwent and Ladybower reservoirs in the Peak District.

Then Nottingham plans to try a second type of charge permitted by the transport act - a "workplace parking" levy, that obliges employers to pay £150 a year for each space they lay on for staff.

Bigger schemes are pending for Edinburgh in 2006 and Bristol in 2007, which both hope to charge for entry to their entire city centres. Manchester and Leeds are waiting in the wings, although both want to improve public transport first.

Environmentalists say that local politicians are finally realising that building roads is unsustainable.

Steve Hounsham of Transport 2000 says: "There comes a point when you can't fit much more traffic into city centres - we're reaching that point now."

The Durham charge is policed by a barrier, where drivers either pay or show a pass. Those who cannot, or will not, pay are allowed out but will be registered on camera and later fined £30.

The council said that in its last round of consultation, it had a total of seven objections from Durham's population of 30,000. Once the charge is in place, the mood may change. Cities elsewhere in Britain are unlikely to be so docile.

Changes ahead

London

From February 17, drivers will pay £5 a day to enter the centre of the capital between 7am and 6.30pm, Monday to Friday. Cameras at junctions will record every number plate. Motorists who have not paid will be sent an £80 penalty notice. Critics say public transport cannot cope with any more commuters.

Derbyshire

Ladybower and Derwent reservoirs are popular tourist spots, attracting two million visitors a year. The county council wants to charge motorists for use of the approach road.

Bristol

Bristol has 500,000 car movements in and out each day. Local authority plans a £1 charge for vehicles entering a mile-wide central zone during morning rush hour, to begin around 2007.

Edinburgh

City plans a £2 charge for cars by 2006. Fee will be levied around edge of the city during the rush hour. At off-peak times, it will apply to a smaller central zone.