Business secretary Vince Cable said the previous government’s pledge to offer subsidies of up to £5,000 for buyers of electric cars was only ‘under consideration’.

He said: “I know there is some frustration and I have been asked several times when is the government going to come to a decision on the £5,000 consumer support for purchases of low carbon vehicles. I can’t tell you what the outcome will be.”

Mr Cable told a conference of the Society of Motor Manufacturers and Traders in London: “Our starting point is very clear. We’ve moved on from the era of subsidies.”

But he said there was a real sense of optimism about some of the developments happening in the car industry despite the difficult economic climate and pointed to the launch of the new Toyota full hybrid car.