Give up your car and get £100

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The scheme has been launched by Islington council, which wants to slash carbon emissions in the borough.

It will give a voucher for £100 - enough to buy a basic bike - to any resident who does not renew their annual parking permit, which cost up to £200 for vehicles with large engines, so-called "gas-guzzlers".

Alternatively, motorists will be offered membership of a car club giving them 24-hour access to a small fleet of cars shared with hundreds of other residents and businesses.

Lucy Watt, Islington's executive member for environment, said the council hoped the rewards would encourage people to get rid of their cars.

She said: "Climate change is high on the agenda for many people in Islington and we want to support people in making greener lifestyle choices.

"Encouraging good behaviour rather than telling people how to live their lives is a more effective way of achieving lasting change. Most people find they don't need a vehicle in central London as the public transport is so good and you can walk to the local shops and restaurants.

"I hope this scheme will encourage more Islington motorists to choose a greener way of getting around."

The council issues 24,000 parking permits and has around 30,000 residents bays across the borough, which can also be used by 8,000 disabled drivers. But there is pressure on provision in some areas.

Councillors hope that if enough residents take up the option of free vouchers, pressure on parking will be eased and there will be less pollution.

Islington also plans to provide 1,000 new secure bicycle parking spaces by 2010 as part of its Climate Change Fund scheme.

Sheila Rainger, head of campaigns at the RAC Foundation, said: "This is an excellent idea and a good example of an authority using a carrot rather than a stick to encourage a change in behaviour.

"It may prove a useful incentive for someone who has been thinking about doing without a car." But Ms Rainger urged the council to monitor the scheme, saying that some people may give up a resident's parking permit but then park their car on roads not subject to parking controls.