London Mayor Ken Livingstone will this week confirm plans to impose a £25 a day congestion charge on drivers of the most polluting vehicles, according to reports in this weekend's Observer.

The proposals had been under consultation, but the Mayor has now reportedly made his decision after polls showed widespread support for the idea. The new rules are expected to be imposed from next year.

Under the new rules, SUVs and other vehicles emitting over 225g per km of CO2 will be charged £25 to enter the congestion zone, while vehicles in road tax bands A and B that emit less than 120g per km will become exempt from the charge. Cars in bands C, D, E and F will continue to be charged £8 per day.

Writing in the New Statesman last month, Livingstone said he expected the scheme to become a big issue at the forthcoming mayoral election.

Environmentalists have broadly welcomed the plans, which will further increase pressure on fleet managers to cut costs by offering employees low emission vehicles as their company cars.

Research last year from accountants Grant Thornton found that for a 50-strong company car fleet, it was almost £60,000 cheaper over four years to run a green fleet compared to a conventional fleet, even before the impact of higher congestion charges was taken into account.