Manufacturers have attacked Government plans to reduce new car list prices and allow dealers to import from continental Europe as “unworkable”.

They say draft legislation published by Stephen Byers, Trade and Industry Secretary, is loosely worded and confusing. They have accused Government officials of failing to understand the complexities of the industry.

The manufacturers are particularly angry that clauses which force the payment of sales bonuses on cars imported from continental Europe were introduced without prior warning only days before the draft legislation was published.

Nick Reilly, Vauxhall chairman, said: “The proposals are so vaguely written I certainly can't live with them and I don't think anyone else can.

“We were disappointed to find new clauses introduced at the last minute and that things we had agreed on changed.” But carmakers have backed away from forcing the Government into a judicial review of the new legislation. They have decided to work with officials in order to stabilise the market before the crucial registration plate change on September 1.

Al Clarke, Society of Motor Manufacturers and Traders' head of communications, said: “The whole document has the look of something written on a Friday afternoon rather than a Monday morning. But we have decided it is better to work with them and find a sensible way through.”

Key areas of concern are the new clauses on car imports and the definition of fleet discounts with carmakers saying it is extremely difficult to accurately define a fleet discount since each deal is individually structured and each manufacturer works to a different system.

Mr Clarke emphasised the SMMT did not see scope for further major price cuts and said independent surveys revealed prices had already fallen by around 10% since the publication of the Competition Commission report.

Franchised dealers have generally welcomed the new legislation. Trevor Finn, Pendragon chief executive, said: “A couple of years ago I would have thought it impossible the Government would be stepping in to protect dealers against the scourge of fleet discounts. What we need now is a quick execution.”