DIXON Motors has launched a head-to-head battle against firms undercutting UK dealerships with cut-price European imports by abandoning 'fantasy' list prices.

Dixons will only use The Dixon Real Price List, which shows the average transaction price achieved by customers and the discount on list price it achieves.

The announcement will add to debate over the future of recommended retail prices, the foundation stone of company car tax calculations, with the Government already making moves to abandon use of list prices in some calculations.

But fleet discounts will still continue, Dixons insists, with the transaction price used as the starting point for negotiations with bulk-buying customers.

The move comes as civil servants reach the deadline this week for drafting legislation based on the Competition Commission's New Cars Inquiry, which could force manufacturers to offer the same discounts to dealerships as fleet buyers.

Customers can access the live list through the Dixon's website - www.dixonmotors.co.uk - showing the prices they can expect to pay on new cars.

Paul Dixon, Dixon Motors' chief executive, said: 'The existence of these fantasy prices has been one of the main factors in the growth of personal imports from Europe. The situation has been exaggerated by brokers who compare the manufacturers' list prices against their own basic price offering. Our aim is to promote real transaction prices, comparable with Europe and better value than many new entrants' offers.'

Dixon added that private customers buying a single car cannot expect to achieve the prices paid by fleets. 'If you are buying 10 vehicles instead of one, then you will get a larger discount. Manufacturers are taking the handcuffs off and allowing us to advertise the real transaction prices.'

Dixons has dealerships representing 13 manufacturers, including Ford, Vauxhall, Fiat, Volkswagen, Rover, Peugeot and Citroen.

The Dixons list shows both new and pre-registered vehicles, but new prices were still not able to match prices offered by the newest European import launch - Virgincars.com.

For example, a Ford Focus 1.8 Zetec 5-door is available for £10,721 from Virgin, but £12,485 from Dixons, compared to a list price of £13,500.

Dixon added that buyers must take into account the convenience and shorter lead times of buying in the UK. Deposits of 25% could be demanded for buying abroad, which could be held for total lead times lasting several months.