General Motors, DaimlerChrysler, Isuzu Motors and several car dealers have dropped a lawsuit against a California clean-air programme aimed at cutting emissions in the state, the companies said in a joint statement, according to Reuters.

Changes to the plan recommended by state regulators will make it more practical for manufacturers to comply with the new regulations by selling vehicles other than just electric cars, the original intent of the California regulations, the report said.

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

Reuters noted that the California Air Resources Board (CARB) designed a programme in the early 1990s to force vehicle makers to sell a certain number of non-polluting, electric cars or trucks, termed zero-emissions vehicles by the industry.

Last year, several car makers and dealers won an injunction in a US District Court delaying the implementation of the mandate until 2005, the news agency added.

Earlier this year, the CARB changed the mandate to give car makers credit for sales of fuel cell vehicles and hybrids, which have both petrol and electric engines, Reuters said.

Under the new rules, car makers will have to deliver at least 250 fuel cell cars - which generally run on hydrogen - or larger numbers of battery-powered vehicles by 2008 and the target rises to 27,500 by 2014, an air resources board spokesman told Reuters.

CARB chairman Alan Lloyd said in a statement cited by Reuters that the agreement will help free resources both within the California agency and in the automotive industry to work on advanced technology, including fuel cells, "to help us achieve California's goal of a zero emission vehicle fleet."

Still at issue, Reuters added, is a California initiative aimed at reducing greenhouse gases, such as carbon dioxide, from vehicles.

The news agency said vehicle makers see that effort as an attempt to boost fuel economy standards, which they argue is a right reserved for Congress - recent efforts to raise fuel economy standards in Congress have failed.