A car that runs on air and releases no pollutants into the atmosphere at low speeds could be offered for sale in India as soon as this year.

The three-seater fibreglass OneCAT weighs just 350kg and is expected to be priced at about £2,500. The technology under its bonnet is backed by Tata, the Indian conglomerate that sent a shockwave through the auto industry last month when it unveiled the world's cheapest car, the £1,250 Nano.

Refuelling involves topping-up on compressed air, which is used to power the OneCAT's piston engine. In a couple of minutes - and at a cost of as little as £1 - the vehicle is ready to travel another 200 to 300 kilometres, its inventors say.

The vehicle, which burns small amounts of conventional fuels at higher speeds, has been developed by Moteur Development International (MDI), a French-based, family-owned group that has been working on a roadworthy "air car" for the past decade. "The engine is efficient, cost-effective, scalable, and capable of other applications like power generation," a spokesman said.

Analysts say the technology is interesting but will reserve judgement until the total environmental impact - and practicalities - of the OneCAT can be assessed. Vivek Chattopadhyaya, of the Delhi-based Centre for Science and Environment, said: "What counts is how much energy all the processes involved require - from manufacturing the car to compressing the air."

Mass production moved a step closer last year when MDI agreed a partnership with Tata, under which the companies pledged to refine the technology. The Indian group said that the MDI system may represent "the ultimate environment-friendly engine" and is studying its commercial feasibility.

MDI, which is pitching its engine against rival green technologies such as electric vehicles, bio-fuels and hybrid cars, has separately said that it could launch its first mass-market model this year.

With oil prices running at record levels, energy efficiency has become the watchword of the global auto industry. The need for cleaner cars is nowhere easier to see in India's largest cities - quite literally, in the form of thick blankets of brown smog. Reports of respiratory complaints are rocketing while more than 1,000 new cars are registered in New Delhi every day.

Cold business logic speaks as loudly as ideas of social responsibility: Toyota's success in building greener cars was widely seen as key when the Japanese company surpassed General Motors as the world's largest car maker last year. Against that background, the MDI project will be tracked closely across the auto industry - not least because the French group has claimed incredible figures for past prototypes.

According to MDI, its fleet includes cars could cover 100km for about 60p. A full tank - of compressed air - would last for up to 10 hours and a top speed of about 70 miles an hour has been claimed.

Meanwhile, a change of oil should only be necessary every 30,000 miles or so and the air expelled from the car's engine will be clean and cold - which means it can be used in the on-board air conditioning unit.

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