Liang Xinguo, a Beijing taxi driver, was excited to hear the encouraging news that old taxis that heavily pollute the air may disappear ahead of schedule.

The Beijing financial, environmental protection and transport committee authorities jointly issued a notice on Monday to say that if a taxi is discarded as useless, the company owning it will be given a 4,000 yuan (US$480) one-off payment.

The vehicle must be taken off the road by October, months ahead of schedule.

Taxis, which can travel more than 10,000 kilometres each month, are usually required to be discarded after eight years.

Driver He, in a Fukang sedan, felt he was being treated "unfairly," compared with those driving the so-called high-end brand taxis such as the Hyundai series.

"Both of our unit price is 1.6 yuan (20 cents), so therefore customers prefer to be picked up by a Hyundai, not by me," He complained.

Most drivers are contractual employees with taxi companies. These firms, from a monetary point of view, are reluctant to replace decrepit taxis.

Each driver must give 4,800 to 5,400 yuan (US$585-658) to the company each month.

So obviously receiving a one-off payment of US$480 is less attractive to a firm than several months money from a driver.

But firms were keeping tightlipped on the policy. "I haven't heard about the discarding taxi measures from my boss," said a source with the Beifang Taxi firm, which owns about 3,000 taxis.

Beijing, home to nearly 70,000 registered taxis, employs 130,000 drivers. It is the largest taxi market, accounting for 8 per cent of the taxis in China.

In 2004, Beijing taxis carried about 550 million passengers with a sales volume of 8.2 billion yuan (US$1 billion). The taxis contributed almost one-fifth of the capital city's fiscal revenue.

Among the 70,000 taxis, more than one-seventh have been replaced by new cars, mostly the Hyundai series, Volkswagen Santana 3000 and new Jetta.

It is estimated that another 15,000 taxis will be replaced by the end of the year.

Some 25,000 will be renewed next year, and all should be updated before the 2008 Olympic Games.

"New Beijing, New Games; this requires a new look for the city," said Sun Jian, a student at the Beijing-based Renmin University of China.

However, Pan Yue, a local language tutor, said the new cars will mean a rise in prices.

"No more 1.2 yuan (15 cents) taxis will be available by then," he said, looking worried.