Alistair Darling moved to head off growing anger from motorists today by confirming that this autumn's 2p rise in fuel duty will be scrapped.
The Chancellor said suspending the rise, which had been due to take effect in October, would "help motorists and businesses get through what is a difficult time for everyone".
Both Mr Darling and Gordon Brown had previously given heavy hints that the increase would be shelved amid soaring oil prices.
However, the Treasury had insisted that no final decision would be taken until closer to the time.
Motoring organisations welcomed the move but called for more to be done to ease the pressure on motorists.
The RAC said: "This is welcome news but it does not go far enough. We would like to see the Chancellor not just postpone future rises but actually cut fuel duty."
The decision was disclosed with little fanfare in a response to a Parliamentary question tabled by a Labour backbencher.
Mr Darling said: "Postponing the planned increase in fuel duty is consistent with the Government's commitment to support the Bank of England in maintaining low inflation."
He added: "The global credit crunch and sharp rises in world oil prices have pushed up prices at the pumps. Today's decision will help motorists and businesses get through what is a difficult time for everyone."
AA president Edmund King said: "We are delighted that the Chancellor has seen common sense. The prospect of extra, Government-inflicted pain was not something that road users were looking forward to.
"Many motorists have endured months of misery and this is a welcome piece of good news for them."Reuse content