The World Health Organisation (WHO) study has put the blame on toxic fumes from vehicles in heavily populated cities such as London. And it says nine out of every 10 people are exposed to levels above recommended guidelines.

It has called it a "top political priority" - with the financial burden equivalent to a tenth of the gross domestic product of the entire European Union.

Dr Zsuzsanna Jakab, WHO's regional director for Europe, said: "Curbing the health effects of air pollution pays dividends.

"The evidence we have provides decision makers across the whole of government with a compelling reason to act."

The report into the costs of air pollution is the first of its kind for the European region.

It blames the issue for 482,000 premature deaths in 2012, from illnesses such as heart and respiratory diseases, blood vessel conditions, strokes and lung cancer.

Indoor air pollution, meanwhile, accounted for 117,200 premature deaths - and it's five times higher in low and middle income countries than in richer nations.

Air quality will be a key theme at the next Environment for Europe Ministerial Conference in Georgia in 2016
Christian Friis Bach, executive secretary of the United Nations Economic Commission for Europe
The ground breaking study was published at the start of a three day meeting in Israel discussing environment and health where more than 200 representatives from European countries have gathered to set future priorities.

Dr Jakab said: "Cross-sectoral work is the backbone of the environment and health process, which was initiated 26 years ago, and it is even more relevant today in the discussions taking place at this meeting in Haifa.

"Mortality accounts for 90 per cent of the cost of air pollution, with the remainder taken up by the diseases caused by it, resulting in a total of almost $1.6trillion US dollars (£1.05trillion).

"In 10 of the 53 countries, the cost is at least a fifth of national GDP."

Christian Friis Bach, executive secretary of the United Nations Economic Commission for Europe (UNECE) said: "Reducing air pollution has become a top political priority.

"Air quality will be a key theme at the next Environment for Europe Ministerial Conference in Georgia in 2016."

Another report released jointly by WHO and UNECE reveals one in four Europeans falls sick or dies prematurely from environmental pollution.