Motorway speed limits could increase to 80mph by 2013.
Transport Secretary Philip Hammond said there had been "huge advances in safety and motoring technology" since the current 70mph limit was introduced in 1964 and raising it "would generate economic benefits of hundreds of millions of pounds through shorter journey times".
A consultation will be launched this year.
The Department for Transport says the current limit is broken by 49% of motorists.
Mr Hammond said: "Cars are much safer, they have more sophisticated equipment now than they did 40 or so years ago. They are capable of driving safely at higher speeds. There are enormous economic benefits to be had by increasing the speed limit and shortening journey times.
"And the current limit has lost its legitimacy. We all know that many, many motorists who are otherwise law-abiding citizens routinely ignore the 70mph limit."
But the road safety charity Brake claimed it would lead to up to 10% more deaths on fast routes while environmental campaigners said it would increase pollution.