New cars would have to feature systems capable of detecting limits through cameras or satellites and automatically applying the brakes.
Existing cars could be forced back to the garage to be fitted with the devices, which would mean that no car in the UK could go over the 70mph speed limit for motorways.
But Transport Secretary Patrick McLoughlin has told officials to fight the move after he was asked for his views ahead of formal proposals by the European Commission (EC).
A Government source said: "It is definitely something that he is keen to resist and he has told officials that it is something we don't want to do. To be forced to have automatic controls in your car amounts to Big Brother nannying by EU bureaucrats."
The EC's Mobility and Transport Department wants to roll out the "Intelligent Speed Authority" (ISA) technology in an attempt to cut the death toll from road collisions by a third by 2020.
ISA technology can use satellites which beam limits automatically to cars from a database or cameras which are able to read road signs.
The AA said while an audible speed alert would be welcome, limiting speed automatically could create dangers of its own.
A spokesman for the AA said: "It could take away people's ability to get themselves out of trouble with a quick burst of speed, such as in overtaking situations where the capacity to accelerate can avoid a head-on collision."