A report by Transport and Environment, a Brussel's based campaign group has found that French, Italian and Japanese carmakers have extended their lead over their German rivals in terms of CO2 emissions in the last year.

In 2006, German groups actually increased average new car emissions of carbon dioxide (CO2) by 0.6% on average. In contrast, French and Italian groups cut emissions by an average of 1.6%. Japanese carmakers made the most progress of all, achieving 2.8% cuts on average with Toyota leading the way with a 5% improvement in the year.

BMW reduced average emissions by 2.

5% but that improvement was more than offset by the two largest German groups DaimlerChrysler and Volkswagen who saw increases of 2.8% and 0.9% respectively.

The T&E study uses figures based on sales in Europe in 2006 and are derived from official EU data. Only groups that sold over 200,000 vehicles were included in the study. 

The best performing companies were PSA Peugeot Citroën (142 g/km), Fiat (144 g/km) and Renault (147 g/km). Toyota (153 g/km) and Honda (154 g/km) took fourth and fifth place while DaimlerChrysler came bottom with average emissions of 188 g/km.

Jos Dings, director of T&E said: "It is ironic that the country that did so much to get a European consensus on new climate targets earlier this year is also home to the carmakers that are holding back progress on one of the most important ways of achieving them.

"Germany's fine automotive engineers should be focusing on making cars leaner and more fuel efficient. Sadly, based on recent progress, they mostly seem to be intent on building ever heavier, larger and more gas guzzling cars that simply don't belong in the 21st century."

"Europe needs CO2 standards that mean fuel efficiency comes built in, not as an optional extra. Launching one or two 'eco' models is not enough to meet the challenges of climate change, rising fuel prices and Europe's increasing dependence on imported oil."