The Wentworth MP, and a local government minister, spoke out as the amount of money made by councils from parking charges alone jumped by 14 per cent in three years to reach £635 million in 2006-7.

Of this, £12 million was collected in fines and charges by councils in South Yorkshire, The Star reported last week.

Now Mr Healey has said councils should charge more for basic services such as off-street parking, despite people in many parts of the country experiencing inflation-busting council tax rises.

In a speech to the Local Government Association, he said: "Only one in five councils are using charging to the full potential. Not just to cover costs but to shape their area."

In a clear sign that he believes motorists should be targeted, Mr Healey said charging more would result in "reducing congestion, improving levels of health and exercise, encouraging the use of local shops."

John Wright, national chairman of the Federation of Small Businesses, said the practice of local authorities using excessive parking charges to raise revenue was killing town centres.

He said: "A lot of businesses rely on passing trade but which customer is going to pay parking charges if they just wish to call in for a bottle of milk at a local high street shop?

"These proposals are diabolical in respect of enabling local high streets and local business to survive.

"We have found that where high streets are surviving there is free parking and the minister should be aware of this.

"Is Mr Healey then going to insist on all supermarkets charging for their car parking?"

Officials close to Mr Healey said that he was referring to charges for council car parks, rather than increases in on-street parking, as well as other council-run services such as local theatres.

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