The number of teams competing in the first Defense Advanced Research Projects Agency (Darpa) Urban Challenge has fallen sharply as final testing takes place.

The contest, in which autonomous cars must negotiate an urban landscape obeying the rules of the road and avoiding other traffic, will be held this Saturday in California.

At stake is $2m for the fastest qualifying vehicle, followed by second and third place prizes of $1m and $500,000.

"The Urban Challenge has united engineers, scientists, backyard inventors and students to develop autonomous ground vehicles that can save the lives of our men and women in uniform," said Darpa director Dr Tony Tether.

"Their enthusiasm and can-do attitude are contagious, and I know you will enjoy seeing them in action as they prepare their vehicles to compete. Let the competition begin!"

Out of 35 final entrants 14 teams have been eliminated after the judges felt that they would not be able successfully to complete the challenge.

Axion Racing was one of the teams cut from the competition after its 'Spirit' vehicle became possibly the first robot car to collide with a human controlled vehicle.

Concerns that corporate entrants may scoop the prize have so far proved unfounded, after the first teams to qualify came exclusively from academia.

Tartan Racing (Carnegie Mellon), Stanford Racing Team, Team Cornell, the Ben Franklin Racing Team (University of Pennsylvania), Victor Tango (Virginia Tech) and CarOLO (Institute of the Braunschweig University of Technology) have all qualified for the final competition.

However, all is not going well for some academic teams. Entries from California Institute of Technology, the University of Virginia and Florida University have all been disqualified.