Mayor of London, Boris Johnson, has dropped the proposed CO2 congestion charge.
The scheme would have seen drivers of large cars billed £25 each time they drove into the capital.
Mr Johnson said he objected to the proposals as they would have "hit families and small businesses hardest".
As part of his revised policy, small cars will no longer be exempt from the charge. He explained the logic behind his decision, saying: "I believe the proposal would actually have made congestion worse by allowing thousands of small cars in for free."
Firms looking to move into commercial property in London are likely to face the congestion charge in some form.
Manchester is the first of a series of cities to trial a government-led scheme to bill car users each time they drive into its centre – Cambridge and Bristol are also planning to introduce similar initiatives.