David Cameron's transport policy review team will propose a radical programme for steep tax rises on air travel and gas-guzzling cars offset by cuts in council tax, VAT and national insurance, it was revealed last night.

The head of the review, former MP and London mayoral candidate Steven Norris, said there had been unanimous agreement that climate change 'is the most important challenge to the planet' - a view he said was shared both by experts and a public that was 'absolutely ready to change' its behaviour.

He added that the proposed policy shift, which he thought Cameron was likely to endorse, could well set up a major general election battle between environmentally radical Tories and Liberal Democrats against a Labour Party that was 'a million miles away' from seriously tackling the issue.

Norris was particularly critical of Gordon Brown, the likely successor to Tony Blair, for having frozen airline passenger duty for five years and added only £40 to vehicle excise duty for the most polluting cars. Under the proposed new policy, road tax on top gas-guzzlers could rise by over £1,000, Norris said.

While dramatic tax changes on airline fuel would take time, because they required international agreements, he said he was recommending an immediate increase in air passenger duty - up from £20 to as much as £100 for long-haul flights, and from £5 to £20 for European trips. He also proposed to halve council tax, cut VAT by 2.5 per cent and NI contributions by 3 per cent.