But the prime minister made it clear that if oil prices remain high he and Gordon Brown would think again.
In a TV interview Blair confirmed his chancellor’s promise that the position would be kept under review.
As a result the proposed protests over fuel prices were cancelled in cities across the UK with the exception of Cardiff.
He made clear that the latest increases were nothing to do with British taxes but the increase in the world oil price.
He said: ‘We can’t give a decision yet. It’s not necessary to give a decision now but we shall keep it under review.’
He said that if prices remained at their current level it was ‘a big leap’ in costs for drivers and firms.
Blair said: ‘We must be sensitive to the needs of motorists and business.’
Earlier Brown said: ‘Rather than opportunistic, short term day-to-day reactions to fast changing events – which do nothing for stability – I will review progress in August.’
The government has been under heavy pressure from Tory leader Michael Howard to scrap the increase in duty in September which has already been delayed since April.
Campaigners had been threatening a repeat of the 2000 fuel protests which gave the Tories a lead in the opinion polls for the only time in a decade.
But protest organisers, the Fuel Lobby, have now abandoned the idea saying they have had a ‘positive dialogue’ with the government.
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