The state Assembly has rejected New York City Mayor Michael Bloomberg's proposal to charge a fee to drive into parts of Manhattan to curb traffic and pollution, killing the plan, Speaker Sheldon Silver said Monday.

The survey of Democratic Assembly members in a private conference comes after days of closed-door negotiations and means the city will forfeit $354 million in federal money for kick-starting the initiative. The Legislature faced a Monday deadline to act on Bloomberg's proposal, which was already endorsed by Democratic Gov. David Paterson, the Republican-led Senate and the City Council.

Bloomberg spokesman Stu Loeser did not immediately comment.

The concept, known as congestion pricing, was proposed to cut traffic and pollution by forcing more commuters onto mass transit. It would have charged most drivers $8 to drive below 60th Street between 6 a.m. and 6 p.m. Monday through Friday. Truckers would have paid $21.

It ran into strenuous objections from legislators from mostly the outer boroughs and New York City suburbs, who said it would unfairly target commuters and their constituents.

"The conference has decided that they are not prepared to do congestion pricing," Silver said. "Many members just don't believe in the concept. Many think this proposal is flawed."

"It will not be on the floor of the Assembly," he said. There was overwhelming opposition to the plan in private Democratic conference, but there was no public vote and individual lawmaker's votes weren't recorded.

"You can speak to members of the conference," said Silver, who represents part of Manhattan. "If I were making the decision alone, I might have made a different decision."

There was no immediate comment from Republican Senate Majority Leader Joseph Bruno or Democratic Gov. David Paterson, who supported the proposal.