Insurance firms rather than individuals would be liable for claims in those circumstances, the Department for Transport (DfT) says.
The DfT intends to let drivers watch TV shows and films on built-in screens, although it will still be illegal to use a phone behind the wheel.
Transport minister Trudy Harrison said self-driving vehicles would “revolutionise the way we travel, making our future journeys greener, safer and more reliable”.
A full regulatory framework is expected to follow the proposed code changes by 2025.
There are no vehicles approved for self-driving on Britain’s roads, but the first could be given the go-ahead this year.
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