The shock statement comes just weeks after the Government announced a review of preferential duty rates on liquefied petroleum gas that currently make it half the price of petrol or diesel.
In a new report released this month, Secretary of State for Transport Alistair Darling rejected a call from the transport select committee for alternatively-fuelled vehicles to be exempt from any congestion charges. In its report on Urban Charging Schemes, the committee welcomed London mayor Ken Livingstone's decision to give the cleanest alternatively-fuelled vehicles a 100% discount on the new congestion charge.
Committee members said: 'It represents an undoubted benefit of the scheme. Significant changes to the exemptions for different vehicle types should be avoided. If not, investment in new technology will have been wasted and the overall credibility of the scheme damaged.'
However, in a suggestion that Government transport policy may take a new direction in its approach to support for alternative fuels, Darling disagreed with the select committee's findings.
In his response, he said: 'The effect of pollution caused by congestion is well known and the Government welcomes any policy encouraging the use of more environmentally-friendly vehicles.
'However, in the context of congestion charging, exempting such vehicles could in the medium and long-term undermine the primary aim of the policy. If motorists switch to alternatively-fuelled vehicles in order to avoid paying the congestion charge, and continue driving as before, the level of congestion will not reduce. Driver behaviour will not have changed, therefore undermining the aim of charging.'
His comments come in light of several fleets opting for clean-fuelled vehicles primarily to avoid the congestion charge and save thousands of pounds.
In the report, Darling also stressed that any expansion of charges to other cities had to be for the right reasons, not simply raising funds. But in return for introducing successful solutions in their transport plans he said local authorities would 'increasingly be rewarded in future settlements'.