Ken Livingstone plans to make Tax Band A vehicles such as the Smart Car ForTwo Diesel exempt from congestion charging in London.

The Mayor of London is proposing an emissions-based congestion charge fee that will penalise drivers of the highest-polluting vehicles, including many 4x4s and luxury saloons. It will also reward those with more econmical vehicles such as the Smart ForTwo Diesel where a charge will no longer apply.

The new £25 rate would apply to cars rated inTax band G for vehicle excise duty, which covers those emitting more than 225g of carbon dioxide per kilometre. Mr Livingstone intends to introduce the new levy in 2009 or 2010, but has asked his transport authority, Transport for London, to see if it could begin earlier. It may require a change in his official transport strategy, which is a lengthy process. Small cars in bands A or B, which emit 120g of CO2 per km or less, will be exempt. The exemptions will be easier for Mr Livingstone to introduce and he said that they are likely to start in 2008.

Mr Livingstone intends to abolish the existing blanket exemption for hybrid and LPG-powered vehicles and replace it with one based only on CO2 emissions rather than any specific technology. This would mean the Toyota Prius, which emits 104g/km, would continue to be exempt but the Lexus RX hybrid, at 192g/km, would not.

Mr Livingstone claimed that almost a fifth of cars that paid to enter the zone each day were in band G, giving Central London the highest concentration of gas-guzzling vehicles in the country.

Mr Livingstone said: “Most vehicles that will be charged £25 are high-priced models. Those who buy them can afford to choose from pretty much the whole of the mainstream car market, but have chosen to buy one of the most polluting vehicles. By making these changes to the congestion charging scheme we are encouraging people to take into account the impact of their choice of new car on the environment and the planet.”

Owners of fuel-inefficient cars in Richmond upon Thames, southwest London, are already facing a tripling in the cost of parking permits to £300, under proposals put forward by the local council.

It is hoped that announcing the plans now would give people plenty of time to change their vehicle for a more fuel-efficient one. A spokesman said that a big increase in the charge was needed to make people change.