Prices reductions on 2 August of more than £3,000 on Focus, around £1,300 on Fiesta and £1,800 on Kuga will bring the price tag of models closer to the actual transaction price often paid, while giving lower tax bills to company car drivers, fleet boss Kevin Griffin claimed.

A healthier relationship between the pound and the euro has also allowed the firm to drop prices after several rises over the past two years took the P11d price of key fleet models such as the Focus 1.6 D over £20,000.

Ford says that its shift in policy, codenamed “Blue Tag 2”, is an attempt to change the behaviour of car selling by banishing high list prices and big discounts.

Nigel Sharp, managing director Ford of Britain, said: 'The traditional way that the car industry has operated in the UK – with high recommended list price matched to high discounts – is causing confusion.

‘Together with our dealer partners we are determined to change that formula and make the whole purchase process more transparent and the value of Ford cars more obvious.’

At the same time as reducing the recommended list price on its small and medium cars, Ford is reducing dealer discounts.

From 2 August, the recommended list price of a Ford Ka Studio will be £7,995; the recommended list price for a Ford Fiesta Studio will be £9,995, the recommended list price of a Ford Focus Zetec will be £15,545 while the recommended list price of a Ford Kuga Titanium will be £22,495. This compares with recommended list prices of £9,360, £11,645, £18,345 and £23,795, respectively, for the outgoing models.