Matthew Carrington, Retail Motor Industry chief executive, says carmakers are not prepared to put up the cash for the idea, which raises questions about where the money will come from to pay for a launch campaign.
"I hope this does not mean the scheme is dead in the water. I hope something worthwhile can come out of it," Carrington says.
A spokesman for the Society of Motor Manufacturers and Traders says no official submission has been made to the Government.
But he adds: "There is concern among manufacturers that there is not the level of interest and involvement in the sector to make a self-funding scheme work. If this is the case then the scheme, in its current form, might not be the best way forward." Industry sources say manufacturers are lukewarm about the proposal because it only identifies good garages, rather than dealing with "cowboys" at the lower end of the sector.
Now it is unclear whether consumer minister Melanie Johnson will go through with plans to present more details on the scheme at the end of this month. No-one from the DTI was available for comment. The news comes just weeks after the RMI called for the Government to inject cash into the scheme.