Motorway drivers are set to be limited to a speed of just 60mph for a 34-mile stretch of the M1 in a bid to meet European standards on air pollution.

The Highways Agency is proposing introducing the new lower maximum as part of an upgrade to the UK's major north-south motorway in Yorkshire and the Midlands.

The new curb on speed comes less than two years after coalition proposals to increase the motorway speed limit to 80mph, which were quietly dropped in the face of safety concerns. The 60mph limit would be enforced between 7am and 7pm seven days a week as part of the new managed or "smart" motorway scheme, where extra capacity is added by converting the hard shoulder into a fourth lane and variable speed limits are imposed to help traffic flow.

The Highways Agency's proposals are being put out for consultation until March. The agency said its environmental assessments showed local air quality would be further damaged if the motorway continued to operate at the current national speed limit of 70mph. More stringent EU regulations on air quality came into force last year.

The Campaign for Better Transport welcomed the proposed speed reduction. Spokeswoman Sian Berry said: "We are pleased to see the Highways Agency is taking public health seriously.

"A 60mph limit will help smooth traffic flow and improve safety. However, as long as the proposal still includes plans to widen the road by opening the hard shoulder to traffic, this is just an exercise in damage limitation and will simply prevent air quality worsening, rather than providing any actual improvement."

The RAC said it was a "landmark proposal" but warned that it would negate the benefits of the M1 upgrade for motorists – and said it feared it could just be the start. Technical director David Bizley said: "This is a landmark proposal as to the best of our knowledge motorway speed limits have not previously been lowered in order to comply with environmental legislation.

"If this becomes reality for the 34-mile stretch of the M1, which seems highly likely, it would certainly negate some of the current benefits of operating this section as a 'smart' motorway where motorists are allowed to use the hard shoulder to reduce congestion.

"More worryingly, it could pave the way for similar restrictions on other sections of motorway.

"While preserving air quality is obviously a paramount concern there will inevitably be a negative impact on business efficiency and individual mobility.

"This powerfully demonstrates the impact speed has on emissions and many will be surprised to hear that a reduction of just 10mph can have such a significant effect on improving air quality."

He said the government should consider reintroducing incentives to scrap older high polluting vehicles to avoid further such speed restrictions.

Roads minister Robert Goodwill said no final decision had yet been taken. He added: "Any speed restrictions to improve air quality would be temporary, only ever considered as part of road improvement work and would not be appropriate for the vast majority of projects started in this parliament.".