The chancellor Alistair Darling has confirmed he is to introduce a scrappage scheme to encourage new car and van purchases.

Van fleet operators considering trading-in their 10-year-old vans for new models will be offered £2,000.

The Government is putting up £300m to fund the scheme and has said the auto industry must match a similar amount.

This means for every £1,000 the Government offers a new vehicle buyer to scrap an old model, vehicle manufacturers must match that pound for pound.

The scheme will run until March 2010 and will begin from the middle of next month.

It will only apply to new vehicles, which dashes the hopes of the lease and car rental industry that nearly new vehicles would also be included.

The BVRLA condemned the scheme as ill-thought out.

“This is yet another government initiative that has been announced before being thought through," said BVRLA chief executive, John Lewis.

"Once again, we may have to wait until the last minute for the all-important detail.”

However the Government has defended it, saying it meets the needs of the entire motor industry.

"It will also get older vehicles off the road and encourage consumers to invest in new, safer, and potentially more environmentally friendly models," business secretary Lord Mandelson said.

“This is targeted action with a capped budget and for a limited time, designed to boost the whole motor trade.

"This will ensure that the benefits of a scrappage scheme are balanced with the needs of other sectors of the car industry such as the second hand market."

The scheme will be run by automotive manufacturers who wish to participate.

For those wishing to take part in the voluntary scheme - some manufacturers will not want to offer their half of the £2,000 rebate - they must be the registered UK owner of a vehicle ten years old or more for over 12 months.

The vehicle they wish to trade-in must also have a valid MoT certificate.