A estimated two million uninsured motorists face having their vehicles confiscated and crushed even if they are not caught driving them, under UK government plans.

The proposals would strengthen the law so that it would be an offence to keep an uninsured car - at present it is only illegal to drive without insurance.

The government says uninsured and untraced drivers kill 160 people every year and injure 23,000 others.

As well as the human cost, uninsured driving adds an extra £30 a year to every motorist's insurance, adding up to £400 million of additional premiums.

The Driver Vehicle Licensing Agency (DVLA) would work with insurance companies to identify uninsured cars.

Letters will be sent to owners found without insurance, threatening them a £100 notice, rising to as much as £1,000 if they are taken to court.

They would also face the seizure of their car, which would be sold, or destroyed if of low value.

"These tough new measures will leave uninsured drivers with nowhere to hide," said Road Safety Minister Jim Fitzpatrick.

The Department for Transport estimates that around 6.5 per cent of British motorists - around two million - drive while uninsured.

Police removed 150,000 uninsured vehicles in 2007, around 400 a day, under powers introduced in the Serious Organised Crime and Police Act 2005.