Drivers will be charged £5 a day for entering central London under proposals put forward today by the capital's mayor, Ken Livingstone.

Mr Livingstone wants the charge to apply throughout the working day, from 7am to 7pm Monday to Friday. Heavy goods vehicles would be charged £15.

He wants to see a fine of at least £100 for anyone avoiding the charge.

Disabled motorists and emergency vehicles would be exempt, and central London residents would pay less.

It is estimated that the scheme would raise more than £200m to be ploughed into improvements in public transport in the capital.

Today Mr Livingstone launched a public consultation exercise asking for the views of 300 key groups in the capital. They include London boroughs, the capital's MPs and MEPs, the business sector, bus operators, taxi and motoring groups.

He also appealed on the internet for the views of ordinary Londoners on the so-called "congestion charge".

Mr Livingstone's initial proposal is for a charging zone north and south of the Thames bounded by Marylebone Road, Euston Road, Pentonville Road, Tower Bridge, Elephant and Castle, Vauxhall Bridge and Hyde Park Corner.

The mayor said: "A city the size of London can only function efficiently on the basis of a fast, safe and efficient public transport system.

"But underinvestment in transport by central governments has plunged London into a vicious circle of an overcrowded tube, unreliable and slow buses and grossly congested roads.

"Traffic speeds have fallen to less than 10mph in central London. This undermines economic efficiency and sharply reduces the quality of life of Londoners."

According to the government's Road Charging Options for London report, such a scheme - based on vehicle registration numbers and backed by digital detection cameras - would reduce traffic by around 12% and would provide an 80% chance of catching non-payers.

Drivers would pay the charge on the day or in advance through local garages, newsagents and shops, by post, telephone or over the internet.

The Conservatives claimed that the scheme would bring chaos to the capital and would punish families and small businesses. Shadow transport minister Bernard Jenkin said it would be "ineffective, unfair and unworkable".

He said: "Tony Blair gave Ken Livingstone this power and he must be regretting it now." He called on the government to veto any such scheme. But a spokesman for the Department of Environment, Transport and the Regions said: "It is a matter for the mayor."

The power for Mr Livingstone to establish the scheme is enshrined in the Greater London Authority Act of last year which set up the capital's mayor and assembly.

It requires that for the first 10 years of congestion charging, the money raised should be put back into transport in London. Local authorities around the country may follow the capital's example.

The London scheme is opposed by several local authorities in the capital. The leader of Tory-controlled Wandsworth council, Edward Lister, said it could become "a new Berlin wall cutting the borough in half and dividing communities".

Wandsworth council estimates that the scheme would cost £1,800 a year to anyone whose livelihood depends on taking their car into central London.

Mr Livingstone's plans received a better reception from business leaders, although the London Chamber of Commerce said private-sector support would depend on the scheme meeting key tests. These include improvements in the public transport network before congestion charging is introduced.

It also wants private motorists targeted, and not business vehicles, and it wants charges to be focused on peak periods and traffic bottlenecks.

The London Chamber of Commerce chief executive, Simon Sperryn, said congestion charges would be Mr Livingstone's "biggest challenge" since his election as mayor. "Get them right and we have an opportunity to solve one of London's biggest bugbears," he said. "But get it wrong and he risks a very public embarrassment and potentially a good deal of harm to the London economy."