The Irish motor insurance industry could put the brakes on ambitious plans to introduce a car club to Dublin city.

The Fine Gael proposal, due to be debated at Dublin City Council tomorrow night, is based on similar schemes in the US and Europe. It would see the introduction of electric cars that could be hired – much like the Dublin bike scheme – from designated locations around the city.

But Irish motor insurers said it would be difficult to duplicate here.

The idea has been hailed as a green initiative combating traffic congestion by reducing the number of cars being brought into cities, particularly among those who could use public transport but who may need a vehicle for a limited period during the day.

Fine Gael councillor Eoghan Murphy, who first pitched the idea at Dublin City Council, said he was influenced by a similar operation in London.

He hopes his motion tomorrow night will shore up support at local authority level and clear the road for a private company to set up. However, insurers have a different view.

"It's difficult to see how a car club could work from a motor insurance point of view," said Michael Horan of the Irish Insurance Federation (IIF).

"There are a potentially huge number of drivers involved in such a scheme. You couldn't just have everybody and anybody picking it up and dropping it off.

"You just don't know what the extent of the scheme is so to try and arrive at a premium for that risk would be very difficult and I imagine it would be very high."

Graham Lightfoot, managing director of the Cork-based GoCar.ie, which was established two years ago and has 100 members, said that insurance was a problem but it was eventually solved.

"When we did a feasibility study for the council I knew I had to crack that nut because I had a pilot in Dublin in 1997-98 and we had problems with the insurance then," he said.

However, Lightfoot said that the driver information required by insurance companies is also required by the club provider. He said there was no increased risk of theft as all the vehicles are demobilised and need a card and pin number to drive.