Consumer affairs minister Simon Bridges says the Government will step in to impose regulation on the wheel clamping industry if a new voluntary code of conduct fails to work.
The code is being developed by industry members and will set out minimum standards and good practice, and clarify what consumers can expect from operators.
Mr Bridges says there has been growing interest and concern in recent months about the way wheel clampers operate.
He says work will begin on a draft code over the next month.
Mr Bridges says the Government could implement legislation on the industry if the code fails.
But he would not be drawn on how long the Government would give the industry before stepping in if the code does not work.