London ranks as one of Europe's unhealthiest major cities, having done little to tackle deadly particles from diesel vehicles, according to a major air quality study published on Wednesday.

The home of the 2012 Olympics ranks "below average" in a soot pollution league table by German environment and consumer groups, coming behind Glasgow, Copenhagen and Stockholm. Berlin is judged to have Europe's cleanest air and only Düsseldorf, Milan and Rome are judged to have worse air than London.

The survey, which comes after Barack Obama last Friday put off legislation to force US cities to clean up air pollution, shows that bad air quality in Europe causes nearly 500,000 premature deaths a year across all countries, and costs up to €790bn a year to address. It supports two major official air quality studies published earlier this year in Europe and Britain.

The 17 cities were judged on the action they had taken to reduce soot in the air between 2005 and 2010 when new European limits for particulate matter (PM10) came into force.

London was ranked low because of the "backward steps" it has taken to address air pollution since 2005. It has tightened its low emission zone for heavy goods vehicles and promoted some cycling and walking, but it has halved the size of its congestion charging zone, scaled back plans for new hybrid buses and sharply increased public transport fares. Nine criteria including traffic management, the shift to sustainable public transport and public information were taken into account.

"With less than a year to the Olympic Games, London is doing less to deal with its dangerous air pollution levels than other major European capitals. The government and the mayor of London can no longer ignore the biggest public health crisis since the great smog of 1952," said James Grugeon, chief executive of Environmental Protection UK, an NGO that is part of a coalition of environment and health groups campaigning to raise awareness of air pollution and put pressure on government to meet minimum EU air quality laws.

"It's shameful that Londoners are still forced to breath dirty air. Urgent action is needed by both the mayor and UK government to help Londoners breathe more easily - and this will also help tackle climate change," said Jenny Bates, London campaigner for Friends of the Earth.

"The mayor seems to have crippled the potential of existing measures to improve London's air quality," said Simon Birkett, head of the Campaign for Clean Air.