The report by the National Atmospheric Emissions Inventory (NAEI) attributed the drop in greenhouse gas emissions to several factors including; the introduction of catalytic converters on cars, a move towards low sulphur and lead-free petrol and a switch to gas from coal and oil in power generation.

Environment Minister Michael Meacher said the downward trend was welcome, but warned of complacency.

"Even though these figures are encouraging, we must not be complacent. There are still significant problems where we need to do more, for example, to further reduce greenhouse gases and harmful pollutants such as ammonia and particulate matter," he said in a statement.

The government has a target to cut greenhouse gases by 23 percent by 2010 on 1990 levels.

This is almost double the target of 12.5 percent to which the UK is committed under the Kyoto Protocol and there are signs emissions are rising as generators return to using coal-fired power stations in the face of rising natural gas prices.

The Department of Environment Food and Rural Affairs (DEFRA) said substantial curbs on sulphur dioxide emissions across the UK and Europe had cut acid rain by half over the last 12 years.

"Damaged freshwater lakes and streams are showing signs of recovery," it said.

But DEFRA warned of a new threat: "Nitrogen oxides and ammonia are the main air pollutants that must be tackled to stop future damage."

DEFRA's warning is based on a study commissioned in 1998 from the National Expert Group on Transboundary Air Pollution (NEGTAP) to look at changes to air quality over the last 12 years, and published this week.

The bulk of Britain's ammonia emmissions come from farm animal manure, causing over-enrichment of land and waterways, said the report.

Certain species rampage unchecked through this ultra-fertile environment, smothering the slower growing plants beneath them and choking streams and rivers. Nitrogen oxides enter the atmosphere from car exhausts and industry, creating health-damaging ozone and contributing to acid rain.

"High levels of ozone, often associated with episodes of poor air quality, have declined by 30 percent since 1986," said DEFRA.