Plans have been unveiled in Chicago to seek funding for the world's first ethanol-hydrogen fuelling station.

The $3 million fuelling station would convert liquid ethanol, a corn-based fuel, to hydrogen gas for use in a fleet of fuel cell vehicles currently being tested in the US city.

The state senator, Barack Obama, and congressman Rahm Emanuel, have proposed the move as an alternative to an energy bill passed by the US Congress last week, which they say will do nothing to alleviate rising fuel prices.

"High gas prices are not going to be solved by $8 billion subsidies to oil companies," said Mr Obama. "We have to start pursuing renewable energy strategies."

He added that the pilot programme could have "widespread ramifications".

Chicago's fleet of vehicles already includes more than 50 electric hybrids, along with 104 vehicles that run on compressed natural gas and nearly 200 "flexible-fuel" models that burn concentrated forms of ethanol fuel known as E-85.

Ethanol is in good supply in the US, with production expected to reach over four billion gallons throughout the country this year.