Hard-pressed motorists have received an early Christmas present with news that next year's planned 2p a litre fuel tax rise will definitely be scrapped.

Chancellor George Osborne confirmed the abandonment in his Autumn Statement today.

Mr Osborne had first announced at this autumn's Conservative Party conference that the 2014 rise would be cancelled - but only if this was financially possible.

RAC Foundation director Professor Stephen Glaister said: "Confirmation of Mr Osborne's conference promise will be welcomed by 36 million UK drivers, not least the record number of workers who now commute by car, some 17 million in total.

"But 60% of the pump price is still taxation and about 7% of all the Chancellor's income comes from motorists. Whichever way you look at it drivers are doing more than their fair share to prop up Government spending."

There was further good news for travellers when Mr Osborne announced that January 2014's rail fare rise for regulated fares - which include season tickets - would be limited to the RPI rate of inflation rather than RPI plus 1%.

With the rise being based on the RPI rate in July 2013, this means that the average rise in January 2014 will be 3.1% rather than the expected 4.1%.

Manuel Cortes, leader of the TSSA rail union, said: "We are pleased that the Chancellor has at last recognised the cost of living crisis being faced by millions of rail passengers.

"A rise of 3.1% cent will be welcomed, even it means the Coalition have still increased fares by almost 20% since June 2010. Now we want to see an end to annual fare hikes altogether with a freeze in 2015."

AA public affairs head Paul Watters said: "Cancelling fuel duty next year tells drivers that the Government is trying to help offset some of the impact of highly volatile pump prices over the past two years.

"At the pump, a 2p-a-litre increase would have been equivalent to a £1 a tank increase for small cars and £1.40 for (a Ford) Mondeo family."

He went on: "Pump prices that have shot up 8p to 10p a litre on occasions during 2012 and 2013 have sapped drivers' ability to get by.

"Up to 76% of AA members have had to cut back on car use, other spending in the family budget or both. Let's now hope that the players in the oil and fuel markets don't cancel out the Chancellor's generosity."