EAST Lancashire Euro MPs have voted down a plan that would have slashed the cost of diesel fuel used by heavy goods vehicles.

MEPS from all parties rejected European Commission tax proposals that would have halved the price of commercial diesel from £520 per litres to £245 by 2012.

The European Commission had proposed introducing a standard rate of diesel tax across Europe to deal with the problem of fuel tourism, with lorry drivers crossing national boundaries to fill up tanks with the cheapest fuel.

The issue was highlighted in fuel tax protests in 2000 when British hauliers claimed they were being undercut by French rivals because of different rates of fuel duty.

Although the move would have put diesel prices in some parts of Europe up, British hauliers would have benefited because UK fuel duty is the highest in Europe.

But MEPs of all parties joined in the European Parliament to vote it down, either for environmental reasons or through concern about EU-wide taxation.

Liberal Democrat Chris Davies said that he had no regrets about the vote.

Mr Davies said: "I support EU-wide taxation that can prevent countries competing against each other in ways that damage the environment.

"But putting down fuel tax in Britain would damage the rail freight industry and put more lorries on local roads.

"The government would still have to find the tax money from somewhere, so we could be short term winners but long term losers."