Changes to scheme mean people with autism and dementia could be entitled to parking permits.
People with hidden disabilities could soon be entitled to blue badge car parking permits under Department for Transport proposals.
The DfT said the change would make it easier for people with conditions such as dementia and autism to travel to work, socialise and access shops and services in England.
It is hoped the move â€“ which would be the biggest change to the blue badge scheme since it was introduced in 1970 â€“ would help create parity in the treatment of physical and mental health.
The DfT said councils had different interpretations of existing rules, and only some recognised hidden disabilities. The new policy is designed to provide â€œclear and consistentâ€ guidelines.
About 2.4 million disabled people in England have a blue badge. This enables them to park free of charge in pay-and-display bays and for up to three hours on yellow lines, while in London they exempt holders from having to pay the congestion charge.
Approximately three out of four blue badge holders say they would go out less often if they did not have one, according to the DfT.
The changes being put to an eight-week public consultation also include blue badge assessments being carried out by a greater variety of healthcare professionals who can spot whether mental illness is causing mobility problems.
Sarah Lambert, the head of policy at the National Autistic Society, welcomed the proposal and said amending parking permit access could be â€œa lifelineâ€ for many autistic people, who often do not qualify under current regulations.
Autistic people can suffer anxiety from not being able to park in a predictable place close to their destination, and some can â€œexperience too much informationâ€ from the environment around them on public transport, Lambert said.
â€œWe hope the government will make this important change and we look forward to working with them to make sure that autistic people and their families benefit.â€
Nearest tube: Elephant & Castle underground station (Northern and Bakerloo lines).
Nearest Railway Station: Elephant & Castle
Buses from Elephant and Castle: ask bus driver for Burgess Park. Bus numbers: 12, 171, 148, 176, 68, 484, 42, 40, 45