Transport Secretary Philip Hammond is proposing to allow.
Companies would be able to avoid charges by carrying out works during quieter periods or, if appropriate, at night.
Any council wanting to put in place a lane rental scheme would need to gain approval from the DfT.
It is proposed that schemes should initially be trialled in one urban and one non-metropolitan area to test their effectiveness. London is pitching to have the first scheme up and running by next spring.
Any revenue raised from lane rental charges should be used by councils to fund measures that could help to reduce future road works disruption, DfT says. This could include infrastructure work, research or measures to improve the management of works.
London is proposing to set up a roadworks innovation fund, jointly overseen by Transport for London (TfL) and major utility companies, to develop and invest in new technology such as quick curing materials and improved plating technology. By making these technologies more widely available to the industry, utility companies and TfL will be able to carry out more works outside of disruptive times, meaning that charges could be avoided.
TfL says that a further use for the fund could be to construct infrastructure such as pipe subways to enable utilities and TfL to install and maintain plant, such as pipes, ducts and cables, without the need to excavate the highway.
The Department for Transport says that lane rental charges must be avoidable and proportionate to the costs of congestion. Councils are also being encouraged to apply the same principles to their own works and come forward with lane rental schemes that fit local needs.
Philip Hammond said: "Everyone knows how frustrating it can be when you are sat in a traffic jam, unable to get to work or drop off the children at school because someone is digging up the road.
"This disruption is expensive as well as inconvenient, with one estimate valuing the loss to the economy from road works congestion at £4bn a year. We simply cannot afford this.
"That is why I am putting forward proposals which would incentivise utility companies and local authorities to carry out their works at times when they will cause the minimum disruption to the travelling public.”
Consultation on the DfT plans runs until 31 October 2011.
The consultation document can be found here: http://www.dft.gov.uk/consultations/dft-2011-25