Vehicle Excise Duty road tax changes that are set to be implemented next April could be delayed for some cars.
The changes meant that from next April all cars registered since 2001 would face above-inflation rises in Vehicle Excise Duty (VED).
However, it is now expected that the increases for cars bought after 2001 and before 2006 will be delayed for at least a year by Chancellor Alistair Darling.
The extra duty will still apply to cars bought since 2006, however.
The changes are expected to be announced in Mr Darling's Pre-Budget Report.
The move should see off a rebellion by Labour MPs, who feared drivers were being targeted unfairly at a time of economic hardship.
The VED changes would have affected almost 70% of Britain's 26 million drivers. The AA estimated that increased VED for higher-polluting vehicles purchased after 2001 would make cars valued up to 2,100 almost impossible to sell.