Sun Microsystems has approached IT services company Capita with a proposal to use Radio Frequency Identification (RFID) tags to manage the congestion charge in London.

Although RFID technology has a major role to play in supply chain efficiencies, Sun argues that there are potential benefits which organisations have so far failed to grasp.

Leslie Stretch, UK managing director at Sun, told vnunet.com: "RFID could provide a different solution to the congestion charge.

"The existing system is expensive to run. Using RFID would eliminate the image recognition piece and the camera checking."

An RFID-based system would also be far less easy for motorists to evade, according to Stretch.

But any such move is likely to be met by opposition from privacy and civil liberties groups, which only last week demanded a halt to the use of RFID tags on consumer goods.

And a spokesman for Capita told vnunet.com: "If discussions have taken place between Sun and Capita it's at such a low level as not to be relevant. I don't think we stand anywhere on RFID.

"The congestion charge scheme met the specific requirements for Transport for London. I'm not going to speculate on the future technology requirements for other cities."

Sun has built an RFID test centre in Scotland. The 120,000 square foot facility, scheduled to open in February next year, will provide testing facilities for RFID applications and help firms to comply with regulatory standards and privacy protection.

"It's about bringing customers in to work with us on all the possibilities of RFID. It's not about retail and supply chain, it's about mobility," said Stretch.

"I see it as a centre of joint ideas. If there are successful engagements, that's how we'll make money."

Analyst IDC predicts that there will be one trillion RFID devices in use within the next 10 years from less than one billion today.