Thousands of jobs could be created by abolishing Britain's high fuel duties, campaigners claim in a meeting with a treasury minister.

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FairFuelUK, which is backed by the RAC, warned Chloe Smith that fuel taxes need to be slashed urgently in order to revive a stagnating economy.

The claims were made after a report by the Centre for Economics and Business Research suggested that a cut of 2.5p per litre would create 180,000 jobs in the first year at no net tax loss.

A bolder cut of 5p would create another 30,000 jobs, the report said, adding that despite costing the exchequer £1bn, this would be offset by increased confidence.

Yet another set of figures obtained by Tory MP Philip Davies indicated that taxes and duties in Britain are the highest in Europe. Accounting for 60 per cent of the price of petrol, and 58 per cent for diesel, tax rates fare badly compared with countries such as Cyprus, where 43 per cent of prices go toward petrol taxes, and Luxembourg, where 38 per cent is for tax.

Disable the economy

"These figures are another sign that we are going the wrong way with fuel duty," FairFuelUK founder Peter Carroll said. "We are calling on the chancellor for a sea change in policy. He may claim that he has no money, but high fuel duty is killing the economy."

The organisation's national spokesman, Quentin Wilson, added: "Quite rightly, the chancellor's priority is on stimulating growth in order the pay down the deficit. Here is a way to do both."

Earlier, he told the BBC that "everyone knows that money spent on high fuel duty is not spent in the wider economy". He added: "If we get this awful spectre of having to spend £120, £130, £140 to fill up the family car, that is really, really going to disable people and disable the economy."

However it is thought that Chancellor George Osborne is unlikely to be swayed by the demands a day ahead of a leap year, in which the extra day is expected to bring in an additional £56.3m in fuel duty revenue, according to the AA.

The motoring organisation said this gives him more scope for not going ahead with the 3.02p-a-litre increase in fuel duty scheduled for 1 August 1.