More green cars than gas-guzzlers will be sold this year for the first time as drivers respond to rising fuel prices and environmental concerns.

Sales of new cars in the £300-a-year top road tax band fell last year by 15 per cent to the lowest level on record, according to industry figures obtained by The Times. Sales of low-emission cars in bands A and B — which are either zero-rated for road tax or pay £35 — leapt by 17 per cent.

The Society of Motor Manufacturers and Traders (SMMT) forecasts that sales of band G cars paying £300, such as the Porsche Cayenne and the BMW 7 series, will continue to fall sharply and be overtaken this year by sales of cars in bands A and B.

Despite the publicity given to the Toyota Prius and other hybrid cars, which combine a petrol engine with an electric motor, most of the 128,646 low-emission cars sold last year had diesel engines. The least polluting conventional car, which delivers an average of 72 miles per gallon and emits only 99g of CO2 per km, 5g/km less than the Prius, is the diesel VW Polo Blue Motion, introduced last year.

The Government is planning to accelerate the shift to low-carbon cars with extra taxes on gas-guzzlers and concessions for the greenest models. The changes, which may include a widening of the price gap between each road tax band, are expected to be announced in the Budget in March. Up to now the Treasury has protected drivers of medium-sized cars from significant increases in road tax. But a study for the Department for Transport, published last week, found that people who drove cars in the middle tax bands were most likely to switch to greener cars if they had to pay higher taxes. People who drove band G cars were more likely to absorb any extra cost.

Julia King, the Vice-Chancellor of Aston University, who was appointed by the Government to review low-carbon cars, is planning to recommend a number of tax measures. These may include a purchase tax and incentives to encourage companies, which buy 55 per cent of new cars, to invest in greener fleets. Professor King is particularly keen on the development of “plug-in hybrids”, which have batteries that can be charged on a green energy tariff.

The European Commission has proposed a directive that would force manufacturers to reduce the emissions of the average new car from 160g/km in 2006 to 130g/km in 2012. The Government has hinted that it will allow the date for achieving 130g/km to move to 2015. This would help to protect British manufacturers of higher-emission cars, such as Jaguar and Land Rover.

Paul Everitt, the chief executive of the SMMT, told The Times: “We would be setting ourselves to fail if the target was 2012. We believe 2015 is more realistic because it gives us a practical timescale to develop the right mix of cars.” Mr Everitt admitted that manufacturers could do more to inform buyers about cars’ relative emissions levels. Most dealers now display colour-coded labels, similar to those used to indicate the efficiency of fridges and washing machines.

But manufacturers exploit loopholes in the regulations for car advertisements. They are required to give the CO2 performance of the models shown but can conceal the actual numbers by giving a range of figures in the small print, from the lowest-emission model to the highest. The higher-emission models often sell far more units than the lowest.

Mr Everitt said that the SMMT was considering introducing advertising guidelines that would make CO2 performance much clearer. However, he said that freedom of choice should be protected. “Manufacturers don’t want to be seen to be dictating to consumers. We can’t get away from the fact that a significant number of people see it as an emotional choice.”

Stephen Joseph, the director of the Campaign for Better Transport, said: “The SMMT figures show people are already changing their car-buying habits and that we should not believe the doom and gloom from car manufacturers about the impact of tough CO2 targets. The market will adapt.”

Eco-friendly top ten

Sales of low-emission cars, 2007

Peugeot 107 15,333

Ford Fiesta 14,784

Toyota Aygo 14,172

Citroen C1 12,626

Peugeot 207 11,830

Toyota Prius 8,755

Renault Clio 5,230

Toyota Yaris 5,173

Volkswagen Polo 4,436

Mini 4,192

Source: SMMT. Note: the figures do not include manufacturers’ variants that emit more than 120g/km