Britain had the most crowded and congested roads, the fewest motorways and "some of the worst public transport" among leading industrialised countries, the report from Policy Exchange said.

Congestion was now endemic, affecting not just large cities but also motorways and small towns, added the report, which was produced in co-operation with task management company Serco and law firm Bevan Brittan LLP.

"Relatively small" road charging schemes on congestion hotspots would soon pay for improvements, the report said.

For example, a six-hour peak time weekday charge of 10p per kilometre (10p/km) on a six-lane motorway priced to run close to capacity could in a year raise around £1.5 million per km - sufficient to pay for widening to eight lanes or, to construct a brand new six-lane motorway in parallel, the report said.

A charge of 5p/km for cars and light vans and 10p/km for goods vehicles on all roads could, in a year, raise over £25 billion - enough to pay for the construction of 1,200 miles of six-lane motorway.

In context, this would mean that a doubling in the size of the current motorway network could be paid for in under two years.

Policy Exchange chief economist Dr Oliver Hartwich said: "Britain's transport infrastructure is, quite simply, not fit for purpose and unable to meet the needs of a modern country. Transport infrastructure investment has become detached from consumer demand."

Policy Exchange said the deficiencies of UK transport infrastructure were not reflected in a shortage of tax revenues from transport. In 2006 private road users paid around £32 billion in transport-related taxes. Of this, just £8 billion was spent on the road network.

Policy Exchange added that of this £8 billion - which is enough in theory to construct at least 400 miles of six-lane motorway - a large proportion was spent on repairing damage to the roads and another significant portion on anti-traffic and safety measures.