The law setting a minimum charge for parking penalties in the UK could be abolished to allow local authorities to lower parking fines for minor violations.
The Department for Transport (DfT) is considering legal options to make the changes after criticism that councils use parking as a ‘cash cow’.
The DfT is also looking at making five minute ‘grace periods’ – which some councils already operate voluntarily - a statutory requirement.
Local authorities will also have to publish parking accounts to improve transparency.
The announcements form the official response to a House of Commons report published by the Transport Select Committee last year.
The report found ‘a deep rooted perception that local authorities view parking enforcement as a cash cow’.
It also questioned the disparity between parking fines compared with fines for more serious offences such as speeding.
Councils collected record profits from parking charges and fines in 2012/13 but in December Transport Secretary Patrick McLoughlin froze parking penalty charges for the remainder of the current Parliament.
A public consultation – due to end in February - on aggressive parking policies was also launched. It included the idea of scrapping CCTV camera cars for parking enforcement.
Louise Ellman, chairman of the Transport Select Committee, welcomed the Government’s actions. She said: "There is a feeling that people aren't being treated very fairly, and that's what the report was about.
"Councils do have a lot of discretion and that's right as it is a local service but it is about being reasonable.
"Councils must be much clearer about what they are doing with their money and what money they are making."
Professor Stephen Glaister, director of the RAC Foundation, said changes were needed to reflect the fact parking offences were misdemeanours rather than fines.
He added: "We need some proportionality and transparency. It was almost four years ago that the coalition promised to end the war on the motorist.
“It isn't over yet but perhaps these latest proposals will take us a step closer to victory."