Business groups have hit out at rises to the capital's congestion charge.

London Major Ken Livingstone confirmed that the charge for the traffic busting scheme is to rise to £8 in July, currently set at £5.

According to Livingstone, the 60% hike will raise an extra £50 million to reinvest in public transport as well as further slashing congestion on the capital's roads.

Figures show traffic has dropped by 30% since the initiative was introduced in February 2003.

In a sweetener to firms, company cars participating in the fleet scheme will be charged £7 under the new rules, while drivers paying monthly or annually will receive discounts.

But business groups reacted with dismay that the increase has been introduced despite the opposition of 75% of respondents to the public consultation. Many firms located in the charge zone also complain the scheme has led to reduced trade.

Dan Bridgett, from the London Chamber of Commerce, said: "This is an extremely damaging and retrograde step which will appal the businesses of all sizes which are already being hammered by the charge.

"Retailers and service businesses know to their cost that it is driving passing trade away from the centre of London."

A spokesman for the London Retail Consortium added: "Despite overwhelming opposition to this, the Mayor has ignored the voice of business.

"There must be real incentives to use public transport rather than costly deterrents from driving, as all retail is dependent on locations with good accessibility and connectivity with their customers."

Livingstone expressed concerns that traffic levels are slowing creeping back to pre-charge numbers so justified the increases as necessary to maintain the scheme as a deterrent to driving into central London.

"Having agonised over the matter - because the easy option would be to go for £7 with the threat of a further £1 in a year or so's time, I remain of the view that it is better to make a single increase to £8," he said.

"But do not let it be said by anyone that I have had a closed mind. My aim is that congestion charging should remain a robust tool in my task of strengthening London's role as a world city."