Europe is prosecuting Britain for consistently breaking air pollution laws and endangering people's health in urban areas.

Legal proceedings against the government were started today by the EU environment commissioner, Stavros Dimas, and could result in unlimited daily fines.

Britain had been given nearly 10 years by Europe to reduce its levels of the minute, sooty "particulate matter" known as PM10s, which are mainly emitted by industry and traffic.

But EU documents seen by the Guardian earlier this month showed that Britain had been breaking the regulations, now part of UK law, for three years. More than 20 cities and conurbations were found to have dangerous levels of particulate matter between 2005-7.

In a statement, the commission said we have "started infringement proceedings against the United Kingdom for failing to comply with the EU's air quality standard for dangerous airborne particles known as PM10. These particles can cause asthma, cardiovascular problems, lung cancer and premature death."

The decision to take Britain to the court of justice will embarrass the government because it has had since 1999 to come up with a plan to reduce PM10 levels, but has failed to do so. All other major EU countries have submitted plans and successfully negotiated a time extension.

This week the government launched a consultation on the issue, but this was widely seen in Europe as a delaying tactic. The UK has two months to respond to the EU's letter before further action may be taken.

Dimas showed his exasperation with Britain. "Air pollution has serious impacts on health and compliance with the standards must be our utmost priority. It is essential that where time extensions are not applicable the standards are fully respected."

Air pollution near many roads in British cities averages well over twice the UN's World Health Organisation maximum recommended level. If Britain is to reduce PM10 levels it will have to substantially reduce traffic congestion, which could mean unpopular congestion charging and low emission zones.

A spokesman at the Department for Environment, Food and Rural Affairs said: "The UK, along with other member states, intends to apply for a time extension to meet PM10 air quality limits. Twenty-four out of 27 member states also reported breaches of the limits in 2007. We expect to apply for this extension following a public consultation that began on Tuesday 27 January."

But Caroline Lucas, leader of the Green party and MEP for the South East, said the move by the commission was a "damning indictment of Labour's aspirations to position itself as having any credibility on the environment at all". And she said it sent a clear signal to ministers who were going ahead with plans to expand Heathrow airport despite concerns that more planes will push pollution levels up even further.

"Legal action is long overdue," added Simon Birkett, director of Clean Air for London. "This should be a real wake up call to Britain to take air pollution seriously."

In a coincidence, the government also released data on air quality for 2008, showing that particulate pollution varied from year to year, and while there was a long-term decline, the fall was not fast enough to meet the new limits.

A Defra report said that "in urban areas, air pollution in 2008 was recorded as moderate or higher on 27 days on average per site, compared with 24 days in 2007, and 59 days in 1993".