Could this fold-up car be the answer to Europe's urban congestion and pollution? Described as revolutionary and designed in Spain's Basque country, the Hiriko is set to hit the region's crowded streets in 2013.

The two-seater, powered by batteries located in the wheels, has no doors and folds up like a child's collapsible buggy, or stroller, for easy parking.

It even facilitates easy sideways parking in tight spaces, with all four wheels being able to turn at right angles.

Even stranger perhaps, is that it's an American invention. Dreamt up by Boston's MIT-Media lab, the concept was developed by a consortium of seven small Basque firms under the name Hiriko Driving Mobility, with a prototype unveiled by European Commission president Jose Manuel Barroso.

During a presentation to the media, Barroso clambered into the 1.5-metre-long car through the fold-up front windscreen.

“European ideas usually are developed in the United States. This time an American idea is being made in Europe,” a consortium spokesman told AFP.

Its makers are in talks with a number of European cities to assemble the tiny cars that can run 120 kilometres between charges and whose speed is electronically set to respect city limits.

They envisage it as a city-owned vehicle, up for hire like the fleets of bicycles available in many European cities, or put up for sale privately at around 12 500 euros (R130 000).

Numerous cities have shown interest, including Berlin, Barcelona, San Francisco and Hong Kong. Talks are underway with Paris, London, Boston, Dubai and Brussels.

The backers describe the “Hiriko” project as a “European social innovation initiative offering a systematic solution to major societal challenges: urban transportation, pollution and job creation.”