Contentious proposals to introduce a peak time road charge in exchange for almost £3bn to invest in public transport were soundly rejected yesterday – as all 10 Greater Manchester boroughs returned a resounding no.

More than a million people across the area took part in the referendum – an average 53.2% turnout.

The results, announced by returning officer Sir Neil McIntosh at Manchester Central conference centre, dealt a fatal blow to the scheme, which would have created the country's biggest road congestion zone and affected more than 10,000 Lancashire commuters.

The news was welcomed in Lancashire, with many community leaders saying the county should have been given a vote of its own.

Chorley MP Lindsay Hoyle said: "I am absolutely delighted that common sense has prevailed. We were not allowed our democratic right to have a say but the good people of Manchester recognised the effect this would have on others."

Coun Hazel Harding, leader of Lancashire County Council, said: "I always felt that we should have been consulted as well. It is interesting that the thing got a resounding no and people saw it as another form of tax on themselves.

"I thought the investment would have been brilliant but am not sure the right way to meet it is by a congestion charge."

Preston MP Mark Hendrick said the London scheme "seemed like a fairly modest scheme which would have a good impact and turned into a monster. I would have expected it to be the same in Manchester."

Motoring groups also welcomed the decision.

RAC motoring strategist Adrian Tink said: "Motorists are tired of being taxed for going about their daily lives and clearly those in Manchester see this as an additional motoring tax too far. Motorists want to be rewarded for changing behaviour not simply penalised for not doing so."

Edmund King, president of the AA, said: "This comes as no surprise as our latest AA/Populus panel poll showed that 77% of motorists in the North West would vote against local road charging schemes."

Downtown Preston in Business chairman Frank McKenna said: "This is a clear signal that motorists are sick and tired of paying additional stealth taxes."

But Coun Matthew Tomlinson said: "My personal view is that for a city the size of Manchester, it sounded like a good deal."