A two-year study into the possibility of implementing a West Midlands-wide road pricing scheme found that charging motorists to drive into towns and cities at peak times could damage the regional economy.
Passenger transport authority Centro concluded there is no case for road pricing at the moment and little evidence to suggest that London-type congestion charging schemes would benefit businesses or commuters.
The gloomy prognosis came as the region's councils finally ruled out asking the Government for permission to run traffic demand management experiments. Leaders of the seven metropolitan councils, meeting in Birmingham today , said they were not convinced that congestion charging would be beneficial for the region.
It could damage economic competitiveness, particularly in Birmingham, Coventry and Wolverhampton, and it was unlikely that better public transport could be put in place before any charging pilots began.
Transport chiefs are also warning that much of the multi-million pound investment required for improved tram and rail services will have to be raised locally by councils through borrowing and supplementary business rates.
Centro chief executive Geoff Inskip said the region should not rely on Government funding to pay for future infrastructure projects.
The Government should "become a lender of last resort" as far as councils are concerned, he added.
Mr Inskip said there was general acknowledgement that congestion on the roads was a huge problem and had to be tackled, but road pricing was not the answer.
He added: "One of the key concerns that everyone has in relation to road pricing is the question of negative impact on investment.
"We took a very serious look at this. It was not a gut reaction, it was not a knee-jerk reaction. We had serious discussions with businesses and consumers. For businesses, the main savings would be in relation to reduced journey times. Those savings could be passed on to consumers through lower prices.
"However, what also came through was the fact that road pricing has a cost to it. There was no real business case that we could make. There was no compelling case to go ahead with road pricing at this time. The congestion benefits were not there."
Mr Inskip said it had proved impossible to find a way of fairly implementing a region-wide scheme. Cordon-based congestion charging zones around Birmingham, Coventry and Wolverhampton would make those cities less competitive.
One idea examined was to place a charging cordon around the Birmingham city boundary, charging motorists up to £5 a day to drive in and out.
Mr Inskip said: "Birmingham would be disadvantaged in the West Midlands if you brought in a scheme which was for Birmingham and not for Coventry and Wolverhampton."
Centro and the councils will press ahead with a three-point action plan to reduce congestion on the roads and motorways, which is said to cost the regional economy £2.2 billion a year.
A series of "quick wins" involves improving road and junction layouts at congestion hot-spots. The councils are working with business leaders to determine suitable projects.
Centro is also considering hiring "congestion managers" who would patrol major roads with the intention of preventing lorries from stopping to load and offload goods at peak times.
Another idea, according to Mr Inskip, is to promote green travel plans at workplaces and schools.
But the main thrust of the programme is to find ways of financing major public transport priorities, including expansion of the Midland Metro tram system in Birmingham and the Black Country and improving local rail services.
The Government's £2 billion Transport Innovation Fund is available, and no longer tied to road pricing projects. But the West Midlands' share of the pot is unlikely to be large enough to deliver more than a small proportion of the transportation improvements required.
Mr Inskip added: "We have to look particularly hard at the way in which we could fund priorities like the Metro, increasing rail capacity and the runway extension at Birmingham Airport.
"We want Government to fund some of this but we must take greater responsibility ourselves. We need to think of the Government as a funder of last resort."