The proposal is likely to cause a storm at a meeting of European Union environment ministers in Luxembourg.

Alan Pulham of the Retail Motor Industry Federation

Carmakers say the scheme could bankrupt them, but the EU says it is the manufacturers' responsibility to dispose of scrapped vehicles.

There are also fears that, if the plan is adopted, much of the early cost could be passed on to the consumer.

Big waste problem

Scrapped cars represent one-tenth of all of Europe's hazardous waste, with two million cars a year in the UK alone going onto the scrap heap.

At the moment, three-quarters of the weight of a car is recycled as scrap metal, and the rest - rubber, plastic and some chemicals - is dumped in landfill sites.

The EU wants to increase the amount of car that is recycled rather than dumped, and wants manufacturers to take back and dispose of their old models once they have come to the end of their roadworthy life - free of charge.

But the car industry has been lobbying hard to block the proposal.

Car prices may rise

If it is thrown out in Luxembourg on Thursday, it will be a major defeat for European environment policy at the hands of commerce, says BBC Environment Correspondent Tim Hirsch.

Alan Pulham, of the Retail Motor Industry Federation, warns that if the proposal is adopted the cost might well be passed on to the car buyer. But he says it is likely to become cost-effective after a few years as steel would be re-used on a wider basis.

"I think there is every possibility of doing this, and eventually after the initial set-up costs have been absorbed, perhaps a saving for the manufacturers," he says.