US President Barack Obama on Friday shelved new anti-smog standards, dismaying supporters with his latest concession to the Republican agenda enforced by the jobs crisis and sickly economy.

Obama, who will next week unveil a major plan designed to create jobs, is facing fierce pressure from Republicans on multiple fronts, including demands by his foes for him to slice regulations they say are shackling businesses.

After pressure from Republicans and big business, Obama on Friday decided to ask Environmental Protection Agency (EPA) administrator Lisa Jackson to withdraw draft Ozone National Ambient Air Quality Standards.

"I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover," Obama said in a statement.

Opponents had argued that introducing the new standards would cost more than an EPA estimate of up to $90 billion a year at a time when the stuttering economy has stopped creating new employment.

But environmentalists, who formed a key part of Obama's political base in 2008, reacted with outrage.

"This is a new low for President Obama," said Kieran Suckling, executive director of the Center for Biological Diversity, which works to tackle air pollution and global warming.

"He sold out public health and environmental protection to appease polluters. Mr Obama's shortsighted political decision will have long-term health consequences for millions of Americans."

League of Conservation Voters President Gene Karpinski accused Obama of "caving to big polluters at the expense of protecting the air we breathe."

The Sierra Club condemned the decision to delay "critical, long-overdue protections from smog, an acidic air pollutant that when inhaled is like getting a sunburn on your lungs."

Environmental concerns are particularly important to the legions of young supporters who flocked to Obama's campaign in 2008, and who he needs again to turn out in huge numbers in his 2012 reelection bid.

The ozone announcement came hours after the Labor Department issued dismal data showing that the stagnant US economy failed to create any jobs in August at a time of 9.1 percent unemployment and deepening economic gloom.

Obama, with polls showing record low approval for his economic management, is hemmed in by Republicans who control the House of Representatives and is being forced into political concessions which dismay his base.

A White House official insisted however that Obama's decision on ozone regulations was taken purely on the merits of the case.

"This has nothing to do with politics," the official said on condition of anonymity, arguing that the administration had an unprecedented record of protecting the environment.

Obama also insisted he was not ditching his political principles.

"I will continue to stand with the hardworking men and women at the EPA as they strive every day to hold polluters accountable and protect our families from harmful pollution," Obama said.

But Obama supporters have been dismayed by compromises Obama has made in recent months since Republicans seized the House in mid-term elections seen as a repudiation of his leadership.

Liberals were furious that Obama agreed to an extension of tax cuts for the rich passed by president George W. Bush that were due to expire last year.

They were also angry that his deal with Republicans on raising the US debt ceiling in July included huge spending cuts but no new tax hikes for wealthy Americans.

Obama's authority was further compromised in a row this week with House speaker John Boehner over the timing of his address on jobs to a joint session of Congress, now set for Thursday.

Environmentalists meanwhile have despaired that Obama was unable to push legislation on framing a cap and trade system to curb greenhouse gas emissions through a hostile Congress.

Republicans have made clear that they are determined to deprive Obama of a second term and immediately crowed at the president's concession on Friday, and cranked up pressure for more concessions.

"It is only the tip of the iceberg when it comes to stopping Washington Democrats' agenda of tax hikes, more government 'stimulus' spending, and increased regulations," said Boehner spokesman Michael Steel.