Several European cities are struggling to meet new EU laws limiting levels of vehicle emissions that came into force at the start of the year.

The southern German cities of Munich and Stuttgart admitted this week they had already breached the limits, while many others are likely to exceed them in coming weeks.

Italy plans to increase taxes on petrol and diesel to pay for new environmentally friendly buses. Several Italian cities have also introduced partial traffic bans.

The announcements have increased pressure on Germany to grant tax breaks for diesel engine filters and triggered speculation that some cities may introduce temporary driving bans or tolls.

Environmental lobby group BUND said this week the auto industry must install the filters to protect public health.

"Clean air in cities and liveable communities are more important. If necessary, road traffic has to take a secondary place to this," BUND director Gerhard Timm said.

But the prospect of driving bans has sparked industry worries that business could be hit.

"Retailers in the inner cities would be out of reach and would suffer drastic falls in sales," the managing director of of the DIHK chambers of commerce association, Martin Wansleben, told the daily Die Welt. "Those are signals that do not fit with an environment where you have 5.2 million unemployed."

German Economy Minister Wolfgang Clement said the discussion risked harming one of the country's key industries.

"We've found a subject for ourselves in Germany that's taken on quite hysterical proportions," Clement told a news conference. "Some of what we've been hearing has really not been helpful for the car industry or the economy," he said.

But the EU's Verheugen dismissed calls for a relaxation of the limits and said he would introduce further cuts.

"I already announced in January that the limits on diesel particles will be further drastically reduced," he said.