SMEs and van fleet operators have been given a reprieve from London’s Low Emission Zone (LEZ) regulations, which was due to bring LCVs within its scope from next October.

The LEZ regulations already cover lorries over 3.5 tonnes as well as buses and coaches.

Phase three of the scheme, which was due to start in October 2010, and would have affected much smaller vehicles, including vans and minibuses, and even camper vans.

Many van fleet operators who run the estimated 90,000 non-compliant vehicles that use the zone each year would have faced a bill of up to £2,000 for abatement equipment, or £15,000 for a new vehicle.

They would have alternatively faced £100 daily charges or fines of £500 for each day they entered Greater London.

According to the mayor, Boris Johnson, these costs could have tipped firms into receivership and caused job losses.

As a result, he has suspended its introduction and begun a public consultation into whether this new phase of the LEZ regulation should even be introduced.

“I want to do all I can to ease the burden of the economic downturn that is affecting us all at this time.

"Although the Low Emission Zone has been successful in tackling the worst polluters, and will continue to play an important role, it is not the right time to press ahead with extending it,” said Mr Johnson.

He said if he had presses ahead, many small businesses would have been hit hard.

“Simply put, the cost of fitting pollution equipment or getting a new vehicle would have come as punch in the ribs to those who need our help at this time, would have destroyed profit margins, and endangered our businesses.”

The Freight Transport Association (FTA) has welcomed the move. Gordon Telling, FTA’s head of policy for London, said:

“City Hall has listened and reviewed this unpopular and ill-conceived scheme, which amounted to little more than window dressing.

"The LEZ accomplished very little, mainly because a large number of emission-compliant road vehicles already operate in and around London.

"Unfortunately the cost to business – and to Londoners – has been far from small.”

The FTA estimates that bringing vehicles up to the required standards has already cost business around £40 million.

“It was feared that if the go-ahead had been given to widen the scheme to include small vans, many thousands of small businesses, including builders, electricians, plumbers, florists and greengrocers, would have to face punishing costs.

"Many would have been driven out of business, simply because they could not afford the cost of modification, which can reach £5,000, or to replace their vehicles,” said Mr Telling.