The London Retail Consortium (LRC) has hit out against the westward extension of the capital's congestion charge, which came into force today.
The industry body called on Mayor Ken Livingstone to adopt a more flexible approach to congestion charging akin to the one used in Stockholm, Sweden, under which different rates are charged at different times of the day.
The Stockholm system, which was trialled last year, helped to spread the flow of traffic throughout the day by charging motorists travelling at low density times like the middle of the day less than those wishing to travel during peak hours.
Nigel Smith, director of the LRC, said: "The Mayor should not be expanding the existing congestion charging regime now.
"The benefits of the current scheme are steadily slipping away and it's increasingly clear it's a blunt instrument based on outdated technology."
Opponents of the congestion charge extension have warned hotels and restaurants in west London stand to lose £100m revenue a year because of the loss of custom.
A study by the Centre for Economics and Business Research last year also suggested the impact on the hospitality sector would result in up to 2,730 job losses.
By Daniel Thomas