The Institute for Public Policy Research, which has close links with Downing Street, will call for a sharp cut in spending on poster campaigns by the parties when it publishes an inquiry report on the funding of politics.
Research by the IPPR found that spending on billboards represents 50 per cent of election costs. Although some billboard campaigns are good in moderation and create interest in the campaign, the report concludes that they are not effective.
Labour and the Tories buy more billboards than a commercial company would as they see posters as a "numerical race rather than a rational purchase", the report said.
One option is for COI to oversee the purchasing of posters to prevent the party in power snapping up the best sites when government campaigns stop for the election. COI would also prevent parties block-booking poster sites in another client's name.
The report, to be published on 15 October, backs an extension of state funding to political parties. One method would be for the Government to offer some "free" billboard sites to parties in the same way as they are already allowed party political broadcasts.
The plan to give COI a role in elections will meet strong opposition from COI. One Whitehall source said: "This would mean civil servants being drawn into the party political battle, which would be a disaster."
A reduction in spending on posters was supported by Charles Clarke, the Labour chairman, who said at this week's party conference in Blackpool: "If I was a shareholder in a billboard company, I'd say 'keep the current system'. More and more money flows to the billboard owners as the prices go up and I think there is a case for taking out some of the competition in this area."