The Netherlands will introduce a car trade-in bonus of possibly up to 1,750 euros by mid-2009 to help boost sales of new cars and the economy, as well as to cut pollution, the environment ministry said Friday.

"This decision was mainly taken to help the environment but also to stimulate the auto market," ministry spokesman Jaap Eikelboom told AFP, adding that agreement had been reached with the industry earlier in the day.

The announcement came as a spokesman for German Chancellor Angela Merkel said her government must still decide if it will prolong its own popular 2,500-euro wreckage premium at its current value.

Goldman Sachs analyst Dirk Schumacher said "the government is getting cold feet now about the fiscal consequences" and the business daily Handelsblatt said the government had agreed on a new bonus of 1,250 euros.

Germany's "cash for clunkers" scheme, as one newspaper put it, is worth around 3,300 dollars and was expected to be extended to the end of the year, but "no decision has been taken yet", spokesman Thomas Steg told a news conference.

In the Netherlands the government earmarked 65 million euros, with the auto industry chipping in 30 million euros.

Eikelboom expected a total 100,000 vehicles to benefit from the scheme.

A bonus of 750, 1,000 or 1,750 euros would be granted for cars or vans with an age of no less than nine years but still running properly to avoid owners cashing in on junk cars.

"People will have to buy a new or second-hand car made after January 1, 2001, which will be less polluting," said Eikelboom.

The bonus is to be paid from May or June and until the end of next year, unless budget funds have been used up earlier.

Apart from Germany, car scrapping bonuses have also been introduced by Austria, France and Italy to help the auto industry as part of broader economic stimulus packages.