The prospect of an F1 Grand Prix on the streets of London has moved a step closer after the coalition announced new powers for local authorities.
Town halls will be able to sign off major motor races on public roads for the first time, instead of needing to get specific approval from Parliament.
Unveiling the step as he opened Williams' new F1 engineering facility in Oxfordshire, David Cameron said it would mean "more races, more events, more money coming into our country".
"We're going to change the rules so that local councils are able to make the decision so you don't have to have a private member's Bill through Parliament, which we think will be great news for British motor sport," he said.
"More races, more events, more money coming into our country and more success for this extraordinary industry."
The Prime Minister hailed F1 as an "an amazing success story" for the UK, with eight of the 11 teams based here and tens of thousands of people working in the industry
The idea of a Monaco-style Grand Prix on the streets of London has been mooted for some time - with F1 team sponsor Santander even producing a video of what it might look like.
A spokeswoman for Boris Johnson said: "The Mayor is already backing the FIA Formula E championship race in Battersea Park next year and thinks Formula 1 itself is a fantastic event that any city would feel privileged to host - he is always interested in projects that attract jobs and bring growth.
"He is positive that London would do a spectacular job of hosting an F1 Grand Prix; but it is impossible to say what the impact might be without detailed planning and research and the question of air quality and noise impact would have to be looked at very carefully."
F1 supremo Bernie Ecclestone said the shake-up was a "step in the right direction" - but questioned whether a street race in the capital would be financially viable.
"In the past we spoke to the old mayor and all sorts of people," he said. "It just depends on what we can come up with commercially because how are we going to fund it?
"The news is good, but I don't know whether you'd have street racing because it's not cheap to put on something that's safe. Street racing is bloody expensive.
"But if they ever get it together then we'll see what happens. At least it's a good sign, a step in the right direction."
Asked whether government could be persuaded to chip in to make a London Grand Prix happen, he said: "Who knows? Maybe it's possible to get them to help out."
The Government's announcement follows a consultation earlier this year. The change is expected to be added to the Deregulation Bill in the autumn, and could be in force before the general election next year.
The current Private Bill process to authorise a road race can take up to 18 months, and requires the approval of both Houses of Parliament.
Hosting the first three stages of the Tour de France this month is estimated to have boosted the UK economy by more than GBP100 million.
Experts believe easing the rules on road races could lead to an extra 20 motor sports events in Britain per year, generating some GBP40 million over five years for local communities. The revenue from a Grand Prix would be far higher.
Culture Secretary Sajid Javid said: "Motor sport has a huge following in the UK. These changes will provide more opportunities for fans to enjoy the sport locally and give a financial boost to local economies through the added benefits of tourism, shopping and spending."
Edmund King, AA president, said: "We welcome this move. On road regulated motor sport can boost the economy through tourism (re -Tour de France in Yorks). The UK is global leader in motor sport technology and this will help show that technology in practice.
"UK citizens have shown in the London Olympics and Tour de France that they can adapt to road closures and well planned restrictions and will come and support in their numbers."