(Reuters) - The Chinese government is leaning towards retaining local subsidies for electric vehicles after eliminating a prior proposal to scrap the funding, Bloomberg reported on Monday.

The newly amended policy is said to be in final stages of discussions in order to sustain a rising demand for new-energy automobiles in China.

After deliberating on the move to curb local aid to control state expenditure, policy makers are anxious that discontinuing local incentives would weaken the development of the new-energy vehicles sector, according to Bloomberg.

Until last month, it was expected that the country would further cut subsidies for so-called new energy cars in 2018 and phase them out completely by 2020, according to newspaper China Daily that quoted Wu Zhixin, vice president of the China Automotive Technology and Research Center.

China has aggressively promoted plug-in electric vehicles, including spending billions of dollars in subsidies, to curb urban air pollution and help the domestic auto industry establish itself at the forefront of technology.