It follows a ten-year battle of drafting and redrafting of a masterplan by architect Sir Norman Foster to rid parts of Trafalgar Square, Parliament Square and Whitehall of traffic and pollution.

Residents around Parliament Square oppose plans

Last month, Westminster Council outraged environmentalists when it refused to back the project.

Mr Prescott has always been enthusiastic about the idea, known as World Squares for All. It also had the backing of English Heritage, London Transport and the Department of Culture, Media and Sport.

Research showed that banning cars from the north side of Trafalgar, reducing Whitehall to two lanes and replacing Horse Guards Road with a cycle lane would only increase congestion by 3%, with an extra 30 seconds added to journey times, although bus journeys might actually be quicker.

The �20m project would be mainly funded by the National Lottery.

Battle of Trafalgar

But influential residents of Parliament Square and its environs feared that unwanted traffic would be diverted into their area.

Westminster Residents Against Gridlock (WRAG), which numbers several senior Conservative politicians, also argued that there would be a snowball effect across the city and jams would become intolerable.

On July 2, Westminster Council ruled that the project could not go ahead without "effective measures" to reduce the number of vehicles on London's streets by up to 7%.