Some shoppers are restricting purchases to what can be carried

The Royal Institute of Chartered Surveyors (Rics) says the retail sector in the capital is the "big loser".

Its report says 90% of retailers and 75% of leisure occupiers view the charge negatively, and believe turnover is suffering as consumers stay away.

But Rics says there is little evidence of firms relocating outside the zone.

People are put off buying larger items because they can't get them home Kim Church, gift shop owner

The congestion charge was introduced into central London on 17 February, 2003, in an attempt to cut traffic levels and help ease severely clogged roads.

The scheme, run by Transport for London, has also been used to raise money to re-invest in the capital's transport system.

The area in which charges apply is a zone measuring eight square miles (21 square kilometres) within the Inner Ring Road - the most central and heavily congested part of London.

'Huge decline'

One affected retailer is Kim Church, publisher of In and Around Covent Garden, and who also owns a gift shop located off Neals Yard, inside the charging zone.

He said: "I've seen a huge decline in the sale of goods that require transportation other than by a simple carrier bag.

"People are put off buying larger items because they can't get them home.

The charge has caused problems for retailers in central London

"Furthermore my top two suppliers are now refusing to deliver to the shop. As my shop relies on having varied and specialist stock, if that can no longer be obtained the shop cannot continue."

But Rics said the charge has probably had the biggest impact on businesses on the zone boundary, as customers or clients living just outside are unwilling to travel in and pay the charge.

At Lewis and Lewis vacuum repair and small electrical shop, in Marylebone High Street, they said since the introduction of the charge takings had dropped on average 20% below pre-congestion charging levels.

The company owners believes the charge has cut out customers from around Primrose Hill and St Johns Wood, located outside the zone.

Charge monitored

Three months into the charge last year, London Chamber of Commerce found it was having a negative effect on smaller retailers.

But chief executive of Rics, Louis Armstrong said: "The effect on retailers may not be fully felt for years to come, and public transport in London needs sustained attention and investment for the concept of reduced car-use to work."

However, Rics has recommended the effect on retail outlets should be monitored and "consideration given to alterations to the scheme" if trade continues to be hit.

Other suggestions are a need to improve all public transport provision in London, a study of the congestion charge on property markets, and careful consideration to any extension to the scheme.

The Rics report focused on five areas in and around the zone; Marylebone, Soho and Covent Garden, Lambeth and Newington, Islington and Clerkenwell.

It found the congestion charge was having little impact on the residential property market or office space rental.