The days of thick smoke belching out of the back of city buses may soon be over. General Motors Corp. is developing a fuel-efficient diesel-electric bus that could drastically reduce pollution in urban areas.

The buses will have two fuel systems. The wheels will be driven by an electric motor while a diesel engine about half the size of a conventional bus engine will keep the batteries fully charged.

The engine is expected to cut fuel consumption by 40 per cent.

GM has decided to test the bus next year in a city that has become notorious for its foul air -- New York.

The world's largest car manufacturer decided to apply its hybrid technology to a commercial vehicle because it considers public transit a more potentially profitable use than passenger cars.

They say it's difficult to get people excited about electric vehicle technology when gasoline remains inexpensive.

Both Toyota and Honda have also recently introduced hybrid-technology vehicles. Toyota's Prius subcompact sedan is on sale in Japan and will arrive in the United States in 2000. Honda's two-seat V V hybrid car will be exported to the U.S. next fall.