A tiny revolutionary electric fold-up car designed in Spain's Basque country as the answer to urban stress and pollution is to be unveiled next week before hitting Europe's cities in 2013.

The "Hiriko", the Basque word for "urban", is a two-seater whose motor is located in the wheels and which folds up like a child's collapsible buggy, or stroller, for easy parking.

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 first prototype to be unveiled next Tuesday to European Commission president Jose Manuel Barroso.

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

Its makers are in talks with a number of European cities to assemble the tiny cars that can run 120 kilometres (75 miles) without a recharge 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.

The project is described as a "European social innovation initiative offering a systematic solution to major societal challenges: urban transportation, pollution and job creation".