The committee said the benzene in super-unleaded petrol, which has been linked to childhood leukemia and cancer, was dangerous.
It also called for an urgent investigation into the use of ordinary unleaded petrol in cars without catalytic converters, saying research showed that the danger posed by emissions from so-called 'green' petrol was considerably higher than that associated with standard leaded petrol.
The committee's report, Transport-related Air Pollution in London, said the dangers were caused by the 'excessive aromatics', such as benzene, added in place of lead.
Benzene existed in trace quantities in emissions but was present in much larger quantities on garage forecourts and inside car passenger compartments. The report said: 'The evidence we have received strongly suggests that the potential health hazards resulting from the excessive aromatics used in super-unleaded petrol outweigh any possible benefits from the reduced lead.' The MPs accused petrol companies of misleading motorists by running advertising campaigns which stressed the benefits of lower-leaded petrol but ignored the higher level of other dangerous pollutants.
They said the Government should hold urgent talks with the petrol industry to end the advertising, and the gap between excise duties on four- star and super-unleaded petrols should also be eliminated. Ministers should also examine ways to cut aromatics in unleaded fuel and should press petrol companies to fit vapour shields on pumps.
The report concluded: 'Sales of unleaded petrol have been encouraged by aggressive promotion campaigns emphasising its 'green' credentials, but without making the crucial distinction between its use with and without a converter. The result is a huge gap between public perception and reality.'
But the United Kingdom Petroleum Association, which represents the top industry names, including Shell, Texaco, BP and Esso, said it believed the industry's move towards 'green fuel' since the late 1980s was justified.
David Parker, director general, said he deeply regretted the 'unwarranted concern' shown by the committee. He added: 'Unleaded fuel was introduced by the industry in direct response to requests from the Government to reduce the amount of lead in the environment.'
John Gummer, Secretary of State for the Environment, said: 'There is no evidence that there is a significant difference between the levels of benzene in emissions from uncatalysed cars running on premium unleaded or four-star petrol.'
The report won the support of the Automobile Association, which said nothing was being done to protect the motorist from benzene.
Associated Octel, the world's largest producer of fuel additives, said super-unleaded offered no benefits to the environment or the motorist.
Dr Mac Armstrong, secretary of the British Medical Association, said the report sidestepped the underlying issue: that car journeys should be replaced by walking and cycling, and Paul Tyler, the Liberal Democrat transport spokesman, said: 'The best way to reduce emissions is to reduce the number of vehicles.'
Frank Dobson, Labour environment spokesman, said: 'Labour has long argued that urgent action is needed to clean up London's air.'