A scrappage scheme for diesel cars could be introduced within months as part of a plan to lower emissions and improve air quality across the country, the Telegraph understands.

Work is underway by officials in the Department for Transport and Defra on a scheme to offer cashback or a discount on low-emission cars if people trade in their old polluting vehicles.

A government source confirmed that talks had taken place with the Treasury, which would finance the plan, and officials were developing a scheme that could focus on geographical areas around the country where pollution is worst.

Chris Grayling, the Transport Secretary, reportedly told industry experts that he supports plans for a scrappage scheme during a private meeting earlier this month, but that it must be properly targeted.