London's congestion charge is rising from £5 to £8, mayor Ken Livingstone has announced.
The increase will come into force on 4 July. Charges for fleet vehicles will rise to £7 and there will be discounts for people who pay monthly or annually.
The mayor said up to £45m will be raised which will help cut traffic levels and improve public transport.
But Tory London Assembly member Angie Bray said the rise was a "serious blow" to city businesses.
The charge, introduced in February 2003, has been credited with reducing congestion in central London by 30% with 70,000 fewer vehicles entering the zone a day.
Mr Livingstone said 90% of people travelling into the charging area used public transport.
"This will build on what has already been achieved in terms of extended bus provision, and in due course providing additional underground capacity," he said.
"In addition large discounts on monthly and annual payments will make the charge easier to pay for regular users and should lead to fewer penalty charge notices being incurred by drivers who forget to pay the charge."
Those paying on a monthly basis will get three charge-free days and those paying yearly will get 40 charge-free days.
But Ms Bray said Mr Livingstone was having to increase the charge to fund the cost of running the system.
"The revenue levels of the current charge have been so disappointing as it's a very expensive system to run," she said.
"This is a serious blow to many of London's businesses who are already in pain with the current charge level of £5. I suspect they are going to be in agony when it goes to £8."
Lynne Featherstone, Liberal Democrat London transport spokesperson, said: "Traffic levels in central London are still falling, yet our Labour mayor slams a 60% hike on congestion charges.
"Londoners will have a chance to vote against this Labour tax rise at the General Election."
Dan Bridgett of the London Chamber of Commerce called the price rise "damaging and retrograde step which will appal the businesses of all sizes which are already being hammered by the charge".