The US car industry says it will no longer resist efforts to improve fuel economy standards and instead will seek tax credits for customers who buy advanced technology vehicles, says the Financial Times.

The repositioning has been approved by a committee of industry executives after years of criticism by environmental and consumer groups and even some of the companies' own shareholders.

Eron Shosteck, a spokesman for the Alliance of Automobile Manufacturers, told the FT on Tuesday that the industry had agreed to "work constructively" with a National Academy of Sciences panel studying US fuel economy standards. The study was ordered by Congress last year in a compromise with the Clinton administration.

The Corporate Average Fuel Economy (CAFE) standards have barely changed since they became law in 1975 despite major advances in vehicle engine technology. Each manufacturer's fleet must average 27.5 miles a gallon for cars and 20.7 for light trucks.

Since 1994, when Republicans became the majority in Congress, the industry and its political allies have pushed through measures forbidding the Transportation Department even to study higher standards, the FT said.

The alliance argued that its members were already developing advanced fuel economy technologies which would "do more for real improvements in fuel consumption than short-term CAFE increases".

However, high petrol prices and concern about clean air standards in the US and Europe have pushed technology developments and 'green' programmes.

The FT said that Bill Ford, chairman of Ford, last year paid tribute to Henry Ford as "an environmental pioneer" who had experimented with soya beans as a renewable resource for making lightweight auto parts.

"To be candid, over the years Ford lost sight of that vision," he said. "We did the minimum to comply with the law and fought virtually every initiative."

General Motors exceeds CAFE standards for its passenger cars but says meeting the truck standard has been "a challenge". It has poured resources into the development of advanced fuel vehicles.

The FT said that the companies have strong links to the new administration. Spencer Abraham, the new energy secretary, was a Michigan senator and strong supporter. Andrew Card, White House chief of staff, was once the industry's chief lobbyist.

Although President George W. Bush has indicated a desire to crack down on "corporate welfare", the industry is signing up backers for a tax credit bill for new technologies, the FT said.