Congestion charging has cut traffic numbers in London

And plans for a 25% rise in fines for failing to pay the �5 road toll have been shelved until Capita "has sufficiently improved".

The proposals were removed from papers that were due to be discussed at a transport advisory board meeting.

Capita has been fined �1m for failing to meet criteria in its �230m contract.

It secured changes to that agreement in August 2003 because it was failing to make a profit from penalty charges, but it did promise improvements.

PROPOSED INCREASES Discount rate penalty charge notice from �40 to �50 Normal rate penalty charge from �120 to �150 Court charges from �125 to �155 Clamping fee from �45 to �65 Removal fee from �125 to �150 Storage from �10 per day to �25

A Transport for London (TfL) spokesman said: "The mayor is not proposing to increase the penalty charge notice until such time as Capita's performance has sufficiently improved."

Mr Kiley also condemned Capita as being "a long way away" from meeting expectations.

He told the London Assembly that he will consider sacking the contractor unless there were improvements.

"We are now getting real experience of the contractor and it's been a little unpleasant," he added.

Angie Bray, London Assembly Conservatives congestion charge spokesman, said price increases would be an unfair way of trying to bring in more revenue.

She said: "Those who do pay their penalties will simply be forced to pay more to cover up for inefficiencies in the system."

Rebecca Rees, of the AA Motoring Trust, said: "There is absolutely no justification for increasing the congestion charge penalties.

"Clearly, the scheme is not generating the income that TfL was hoping for and now they are looking at ways of plugging the income gap.

"Penalties should be a deterrent, not a main source of revenue."