There will be spades in the ground on the A14 in 2016 and no toll to pay for the £1.5bn upgrade, it will be announced today amid celebrations from campaigners calling for the tax to be axed.

Proposal to force drivers to pay to use a part of the main trunk road in Cambridgshire will be kicked into the long grass at a briefing to industry leaders by chief secretary to the Treasury Danny Alexander and Commercial Secretary to the Treasury Lord Deighton this morning.

The announcement also gives hope to A47 campaigners who feared a go-ahead of the A14 toll plan could set a precedent, and see other 'A' roads including the main route across Norfolk from Great Yarmouth into the Fens also subject to charges.

The government had wanted to raise £300m of the £1.5bn A14 scheme by making drivers pay to use a new stretch of road, but will now go ahead with the major upgrade without a toll.

The money needed to build the scheme has already been allocated in the spending review over the summer, but the £300m that was expected to boost the government coffers in future years will now be found through 'normal budgetary process', Treasury sources say.

Since the details of the scheme were announced earlier this year, business leaders have been vocal in their opposition. Most of the Suffolk MPs, led by Suffolk Coastal's Therese Coffey, have rounded on the prime minister, the chancellor and most recently the transport secretary Patrick McLoughlin to call for the 'poll tax' to be axed, setting out the arguments against the toll.

Hope was given to the campaign when the chancellor said last month that he was willing to reconsider the plans during a visit to Norwich. It was ultimately his decision to scrap the toll.

But the prime minister's spokesman refused to rule out other toll schemes, saying David Cameron's position had not shifted from last week when he told the House of Commons he believed that road tolls could play an important part in providing new road capacity and it was important we find ways to pay for road capacity, in PMQs,

However Andy Wood, New Anglia local enterprise partnership chairman, said: 'Scrapping of the A14 toll would also make it much less likely that tolls could be introduced to fund improvements to the A47 – improvements which remain a key priority for the New Anglia LEP.'

He said; 'The upgrading of the A14 is essential for the local economy, but a toll would have a very negative impact on businesses. The campaign led by the Suffolk Chamber of Commerce has brought together businesses and political leaders to speak with a single voice that has united our area in opposition to a tax that would unfairly target our businesses, at a time when we are leading the country's return to growth.'

Mid-Norfolk MP George Freeman said: 'With the £1bn public sector debt we inherited from Labour still hanging over us of course we have to find new ways of raising investment for infrastructure, and tolling on passing trade traffic may have a part to play in that. But any proposals must be fair on local residents. Norfolk has been neglected for too long and it would not be fair on Norfolk residents who have suffered years of under-investment and have no choice but to use the A47 to get to school, work or shops and services, if they had to finance the A47 through tolls on residents.'

Shadow transport secretary Mary Creagh MP described the A14 as a 'chaotic story', branding the government's approach to infrastructure as 'out-of-touch'.

She said: 'Incompetent ministers delayed Labour's plans for a new road in 2010 and wasted three years on their failed toll scheme. 'As a result costs have shot up by £200m and local people and businesses are still waiting for work to begin on this vital new road.

'The Government's half-baked plan to put tolls on the A14 would have caused chaos on local roads, worsened congestion and threatened jobs at the port of Felixstowe.'