The newly elected Mayor of London has this week unveiled his first environmental policies in the face of fresh criticism over his decision to scrap the £25 a day congestion charge and give the green light to a desalination plant designed to make water from the Thames Estuary drinkable.

Boris Johnson announced today that he would deliver on his manifesto pledge to scrap The Londoner newspaper and invest much of the money saved in planting 10,000 street trees across the capital by 2012.

He said that axing the paper would save £2.9m a year, just over a third of which would be invested in the new tree planting programme.

Johnson added that a third of boroughs have seen a decline in the number of street trees in recent years with deprived areas the worst affected.

"Trees improve the street environment in which Londoners live and work so I will do all I can to save the trees we have and campaign for more trees to protect London's open spaces," he added.

Friends of the Earth campaigner Paul de Zylva said that the initiative represented an "interesting first step" in new mayor's attempts to make good on his promise of making London the world's greenest city.

"But what really matters is finding solutions to the bigger environmental problems facing London – transport and climate change," he added.

The move comes just a day after Johnson angered environmental groups by reiterating his commitment to scrapping the planned £25 a day congestion charge for high emission vehicles and cutting a deal with Thames Water that will see the mayor's office drop a legal challenge blocking the water company's plans for a desalination plant in Beckton, north east London.

Johnson confirmed yesterday that he would follow through with his manifesto pledge to scrap planned changes to the congestion charge, insisting there "will be no £25 charge for large cars, which would hit the wallets of families and small businesses hardest".

A spokesman for the mayor's office said that Johnson remained unconvinced that the higher charge would result in significant reductions in carbon emissions, and believed there were more cost effective means of delivering much deeper emission cuts. He added that a formal announcement confirming the scrapping of the changes would be made "within weeks, not months".

Separately, Johnson also announced he had brokered a deal with Thames Water, which will see him drop the previous mayor's legal action against the company designed to block plans for a desalination plant on the Thames.

Under the deal, Thames Water has agreed to work with the mayor to reduce the impact of road works on traffic congestion and contribute to the proposed project to capture waste energy from the planned Barking Power Station to provide heat and hot water to up to 90,000 homes. The company has also committed to ensure that the energy used to power the desalination plant will come from 100 per cent renewable sources.

Johnson hailed the agreement as "a good deal for Londoners" that had seen him secure "important concessions" on water saving measures and other environmental initiatives.

"Thames Water has satisfied me that the desalination plant will minimise its impact on the environment by using renewable energy, and by being used only when absolutely necessary," he added.

However, environmentalists condemned the move as energy wasting and a distraction from efforts to save water and fix leaks. Darren Johnson, Green Party member on the London Assembly, said that the desalination plant represented "the kind of short cut which we have come to expect from Thames Water", adding that "instead of spending money on this energy-wasting, short-term solution, they should be investing in fixing pipes and stopping leaks ".