Three of America's most powerful vehicle producers have dropped a lawsuit that had delayed the implementation of California's clean-air programme.

General Motors, DaimlerChrysler and Isuzu Motors said in a joint statement that changes in the regulations would make them easier to comply with.

Now, carmakers will receive credit for cutting tailpipe emissions through the use of fuel cells and hybrids as well as electric engines.

GM spokesman David Barthmuss said 'we don't agree with the concept of mandated approaches in automotive technology. But we do agree that the modified 2003 emission vehicle regulation may provide the flexibility that we need and were looking for.'

The California Air Resources Board (CARB) implemented a programme some years ago to sell a minimum number of non-polluting electric or 'zero-emissions' vehicles.

Last year, several carmakers won an injunction in federal court delaying the mandate until 2005. The new rules provide for a phased implementation of the plan.