Green machines set to overtake gas guzzlers as environmental taxes begin to bite

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New figures show that the number of highly polluting cars sold last year fell by 15 per cent to a record low. In contrast, sales of low-emission cars increased by 17 per cent.

The Society of Motor Manufacturers and Traders predicts a continued fall in sales of high-emission band G cars which attract £300-a-year road tax, such as the BMW 7-series and Range Rover 4.4 V8 petrol.

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Carbon gap: the Range Rover 4.4 V8 petrol attracts £300-a-year road tax but the diesel VW Polo Blue Motion is in a much lower bracket

Meanwhile this year sales of band A and B cars - which are either zero-rated for road tax or cost £35 a year - will rise sharply.

The majority of 128,646 low-emission cars sold last year were not the much-hyped hybrid cars - which combine a petrol engine with an electric motor - but more efficient diesel cars.

The diesel VW Polo Blue Motion, launched last year, is the least polluting conventional car on the road, able to deliver an average of 72 miles per gallon while emitting less than 160g of CO2 per mile.

Government plans to encourage greener driving could mean road-pricing schemes, tax breaks for energy-efficient cars and penalties for those with high emissions.

Under measures already announced, the Vehicle Excise Duty rate is to be raised up by £5 a year for all but the cleanest cars, and from £300 to £400 for the biggest gas-guzzlers.

The European Commission is considering forcing manufacturers to reduce the carbon emissions of the average new car from 256g per mile (160g/km) to 208g per mile (130g/km) by 2012.

But the Government has signalled it will postpone the reduction in the limit until 2015 to protect British car makers such as Jaguar and Land Rover.

SMMT chief Paul Everitt said: "We would be setting ourselves to fail if the target was 2012. We believe 2015 is more realistic because it gives is a practical timescale to develop the right mix of cars."

Stephen Joseph, the director of the Campaign for Better Transport, said: "The SMMT figures show people are already changing their car-buying habits and that we should not believe the doom and gloom from car manufacturers about the impact of tough CO2 targets. The market will adapt."