John Prescott, the Deputy Prime Minister, is planning to create "clean- car zones" in Britain's cities in order to meet the Government's tough air quality targets by 2005.
The move will hit drivers of polluting cars, vans and lorries - mainly older or badly-maintained vehicles. Mr Prescott will launch the initiative at an "informal" meeting of European ministers next month in Chester.
Motorists will face mixture of sticks and carrots. Governments want garages in the clean-car zones to offer free emission tests for drivers. Motorists who meet the pollution standards would also require a permit to drive in town centres - and would face on-the-spot fines if they failed to display them.
Civil servants argue that unless action is taken soon, it will be too late to curb rising pollution levels. In 1995, levels of particulates in central London averaged 72 micrograms per cubic metre. By 2005, it needs to be down to 50.
The system of permits is not new - the London lorry ban is a similar scheme. As a measure of last resort, motorists will be fined for driving fume-belching cars in restricted areas.
Drivers in the Westminster Council area - considered to be in the cutting edge of green policy - face a pounds 60 fixed penalty if their vehicles are found to break the MoT limits for pollution. Of the 160 vehicles tested in the first month, 62 failed the roadside tests.
Westminster also runs a scheme to highlight good practice. Drivers who modify their cars to low-pollution engines such as gas or add a high-performance catalytic converter, receive a "green pennant" for their troubles.
However this could be extended to restrict motorists' right to roam. "We are looking to hire consultants to examine the feasibility of such a scheme and are in regular contact with the Government," said Leith Penny, the council's head of environment. "We need to know who would get these permits, who would administer it and who would enforce it," he added.
Civil servants said that the powers of the police to stop moving vehicles could be extended to teams of pollution busters.
On the Continent, such radical measures are not unusual. Stockholm has experimented with clean-car sites, and more recently Paris banned cars from the city centre on the basis of their registration plate.
"We are not considering that measure. The same thing happened in Athens - but it led to a 10 per cent fall in traffic and a 10 per cent increase in emissions because people bought older cars to use for alternative days," said one civil servant.