State media earlier reported that the capital city has also hired a panel of foreign environmental experts to lend credibility to its pollution monitoring efforts during the Games.

This is the first time foreigners have joined the Chinese capital's fight to improve its air quality. Environmental experts had previously cast doubts on Beijing's claims of an improvement in air quality ahead of the Games, which start in August.

Under the new traffic plan, vehicles will be allowed on the road on alternate days - depending on even or odd registration numbers.

The ban, which had been expected, was announced at the same time as a rise in petrol and diesel prices - by more than 16 per cent - effective yesterday. The price hike was to close the gap with soaring global oil prices.

Taxis, buses and emergency vehicles are exempted under the traffic ban. Some heavy-polluting vehicles and those carrying dangerous substances will be banned from July 1.

The authorities hope the new regulations will take 45 per cent of the city's 3.3 million cars off the road and reduce emissions from vehicles by 63 per cent, officials told a news conference.

'Smooth traffic and good air quality are important factors in hosting a successful Olympic Games and also in fulfilling Beijing's promises to the International Olympic Committee,' said transport department spokesman Zhou Zhengyu.

The new rules will also ban most vehicles entering the city from outside Beijing. These vehicles will need special permits and will also need to meet air quality standards.

To compensate motorists for the restrictions, all vehicle owners will not have to pay taxes and road maintenance fees for three months, a move which will cost the government 1.3 billion yuan (S$260 million).

The public transport network, boosted by three new subway lines, is expected to cope with the extra strain of four million more passengers a day. The network will operate longer hours and put on more services.

Special traffic lanes will also be set aside for certified Olympic vehicles to move from hotels, Olympic venues and the Athletes Village.

Officials announced several months ago that during the same two-month period, most construction in the city will be halted, heavy industries will close and even spray-painting will stop - all to clear Beijing's notoriously polluted air.

Some reports have suggested that production cutbacks will come even sooner.

Beijing, which hosts the Olympics from Aug 8 to 24 and the Paralympics from Sept 6 to 17, is one of the most polluted cities in the world.

Air quality is a major concern for many athletes and the International Olympic Committee has said it may reschedule endurance events to prevent potential health risks.

The city authorities ran a test of the ban last August and declared themselves satisfied with the results, even though the impact on air quality was not immediately noticeable to residents.

ASSOCIATED PRESS, REUTERS, AGENCE FRANCE-PRESSE