WASHINGTON - The United States expressed strong support Monday for using high-technology driver's licences as alternatives to passports when crossing the Canada-U.S. border, saying Vermont is developing them.

Canada had been lobbying American officials to endorse licences, saying the plan to require passports is already seriously denting tourism and could damage trade.

The move came as President George W. Bush sat down with Prime Minister Stephen Harper in Montebello, Que., before a tri-lateral summit with Mexico.

More states are expected to announce formal plans in the coming days to work on licences that contain proof of citizenship as well as identity.

Homeland Security Secretary Michael Chertoff said Vermont's plan "helps us strike the right balance between security and facilitation, incorporating 21st-century technology and innovation.''

"I'm pleased we will be able to provide this more reasonable option for Vermonters who travel frequently to Canada,'' said Vermont Gov. Jim Douglas.

"As we move forward with this innovative initiative, we must continue to include our northern neighbours whose economic and security interests are linked directly to our own.''

The Vermont licences will be slightly more expensive than standard ones. They will contain security features similar to a U.S. passport.

Washington state and British Columbia were the first to reach an agreement with the Homeland Security to launch a pilot project looking at driver's licences.

Ontario has been particularly keen on improving its licences.

There have been long delays in acquiring passports on both sides of the border.

People flying into the United States were supposed to require a passport starting in January. But Chertoff was forced to announce a break for American air travellers until the end of September.

He also announced that Canadians and Americans entering the U.S. by car or boat won't need a passport -- or an acceptable alternative -- until at least the summer of 2008.

Regular driver's licences and birth certificates will suffice for several months starting next Jan. 31.

While that was some consolation to critics, a precise date is required to avoid confusions, they said.

The so-called Western Hemisphere Travel Initiative was passed by Congress in 2004 in a bid to plug security holes after the 2001 terrorist attacks.