PEUGEOT managing director Tod Evans is calling for grants and other cash incentives to be introduced to encourage the use of the latest, cleanest diesels.

Peugeot has introduced particulate filters in its new 307, launched this month, but drivers would be more likely to pay extra for the option of a filter on some models if they got something in return, according to Evans.

He said: 'A particulate filter is standard in the new 110 HDi version of the new 307, but it is an option on the 90bhp version and the 1.4-litre diesel version. We are offering a solution to environmental worries about diesel now, but it costs money to put it onto a new car and unless Government gives fiscal incentives, it is difficult to make it happen.

'It is the same for manufacturers. If they were offered a fiscal incentive for hitting the Euro IV target for diesel engines, it would give them the stimulation to go ahead.' Euro IV-compliant diesel engines will escape a planned 3% supplement under the new company car tax regime, the Government revealed last year.