Drivers have been warned the value of 11 million diesel cars could crash “over night” under a threatened Government clampdown.

Documents buried in this week’s Budget revealed ministers are looking at “the appropriate tax treatment of diesel vehicles”.

It is believed this could lead to tax hikes for diesel cars in the Autumn Budget.

Jim Holder, editorial director of What Car? magazine, said: “If the decision is to promote petrol or electrified cars, then diesel cars will lose value over night.

“They will be less desirable on the used car market, and owners could face punishing tax and congestion charges.”

A driver fills up the tank of his car with diesel at a fuel station
Documents buried in this week’s Budget revealed ministers are looking at “the appropriate tax treatment of diesel vehicles”
(Photo: Mark Renders/Getty Images)

The threat comes as owners of older diesel cars are set to be penalised under plans by Mayor of London, Sadiq Khan , to introduce a £10 “toxicity levy” for driving into central London later this year.

Last month Transport Minister Chris Grayling said motorists should think twice before buying a diesel, and should look at hybrid or electric cars instead.

It prompted the Society of Motor Manufacturers and Traders to warn of a growing “anti diesel agenda”.

The trade body says diesel cars are being singled out as the Government battles to meet EU emissions targets.

The last Labour Government went out of its way to encourage diesel cars as they emit less of the greenhouse gas carbon dioxide than petrol versions.

Sadiq Khan plans to penalise drivers of older diesel cars
(Photo: REUTERS)

But there is now mounting concern that they produce more dangerous nitrogen oxides, pollutants blamed for 50,000 to 60,000 deaths in the UK each year.

There are reports that the Government is considering a scrappage scheme to encourage owners of “dirty diesel” cars and vans to trade them in.

Diesels have until recently accounted for about half of all new cars sales.

However, recent data from the SMMT showed sales of diesels plunged more than 9% last month.

Car industry insiders say comparing old and new diesels is unfair.

Chris Grayling has warned drivers to think twice before buying a diesel
(Photo: PA)

They admit there are huge benefits in getting older diesel cars off the road, especially in congested cities where the pollutants are most likely to be breathed in, but say the latest engines are a huge step forward.

Mike Hawes, SMMT chief executive, said, “The automotive industry is investing significantly in new technology to address the issue of air quality, so we look forward to working with government to encourage the uptake of the latest, low emission vehicles, regardless of fuel type.

“Nearly one in two new car buyers chose a diesel last year and getting more Euro 6 diesels on the road will be part of the solution as we also strive to meet our climate change targets.

“Measures to reduce congestion will help as will funding announcements for the design and development of battery technology.”