London’s new mayor, Boris Johnson, is to pay about £400,000 to Porsche, after agreeing to scrap the proposed £25-a-day congestion charge for high-polluting vehicles.

Porsche mounted a legal challenge to the plan after Johnson’s predecessor, Ken Livingstone, put it forward, saying it would be ‘unfair and disproportionate’. The luxury car maker’s five-model range would all have qualified for the £25 fee whenever owners took then across central London on weekdays.

Boris Johnson said throughout his campaign to become Mayor that he would drop the £25 charge. The company has agreed to drop its action, but the Greater London Authority must pay its legal fees. A spokesman for Johnson said paying the £400,000 was the most ‘cost-effective’ end to the episode.

Porsche has said it will donate the money to Skidz, a charity which offers youngsters training in mechanical skills and maintenance.