A modern traffic management system for Dublin would cost £10 million and save £240 million a year, but the Department of the Environment and Local Government is refusing to sanction the expenditure, the Dublin Chamber of Commerce has said.

Traffic jams across the capital could be reduced by 20 per cent if Dublin Corporation bought an upto-date computerised system, the chamber's chief executive, Mr Noel Carroll, said, and the council, as well as the Department of the Environment and Local Government, already knows this.

Mr Carroll, a former executive for Dublin Corporation, said key elements of the city's current traffic signalling co-ordination system dated to the 1980s, describing it as "an inefficient patchwork quilt".

With Dublin's daily gridlock costing the city's economy an estimated £1.2 billion a year, the new system would pay for itself within 11 working days, Mr Carroll claimed. Such systems are widely used in other cities and speed up journeys by co-ordinating and regulating the flow of traffic, especially at middle and inner ring roads.

"The technology is there, the equipment is there, the improvement level is there, and we as the Chamber of Commerce are saying `Do it'! It's not a matter for debate any more," Mr Carroll said. "It is up to the decision of the officials in the Department of Environment to sanction the money to install ."

Compared to the large sums the Government was willing to spend on Garda overtime for traffic duties, the reluctance to pay £10 million for something which would be of immediate and lasting benefit to hundreds of thousands of Dubliners was illogical, he added.

"There is an underlying philosophy that is flawed, which is that the more pain you inflict, the nearer you are to a solution," he added.

"This isn't good enough. The city deserves better. It deserves an intelligent, balanced approach, reasonable - as distinct from huge - investment. And £10 million in the context of the losses that this is inflicting on the economy through losses and waste is reasonable," Mr Carroll said.

A spokesman for the Department of the Environment and Local Government said: "We used to administer traffic management grants, but the DTO [Dublin Transportation Office] now has that function. It is a matter between the local authority and the DTO.