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Luxury carmaker Porsche is taking the City of London to court, saying the City’s 25 pound ($50) daily charge was unfair, would not cut emissions of carbon dioxide and would deter businesses from moving to the city.

London Mayor Ken Livingstone will contest luxury car maker Porsche’s threatened legal challenge over his plan to tax gas guzzling cars driving in the city centre, a mayoral spokeswoman said on Saturday.

In launching its proposed challenge last week Porsche said the 25 pound ($50) daily charge was unfair, would not cut emissions of carbon dioxide and would deter businesses from moving to the city. “Porsche’s claim that it is illegal for the Mayor to introduce this policy is wrong,” said the spokeswoman in a statement after Livingstone received a letter from Porsche setting out its proposed legal challenge.

“The Greater London Authority Act 1999 gives the Mayor the power to do this.”

“Porsche has a vested interest in seeking to prevent London government from exercising its powers to improve the environment. Surveys show a big majority of Londoners support a higher congestion charge for the most CO2 emitting vehicles.

“The Mayor will contest this action vigorously.”

When he announced his plan Livingstone admitted that it would have little immediate effect on carbon emissions but said it would discourage people from driving polluting cars in the city centre and encourage manufacturers to make cleaner engines.

He said the new scheme would raise 30 million to 50 million pounds a year and cover most of the cost of a major cycling initiative that will include a Paris-style roadside bicycle hire scheme in the city centre.

Livingstone, who has made the environment a central plank of his tenure, is facing a tough re-election battle in May. If he loses, his emissions policy is likely to go with him.

The 25 pound daily tax on vehicles emitting 225 grams or more of carbon dioxide per km would apply in the same way as the normal 8 pound ($16) daily charge does to all but the cleanest cars.

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