The Ulez is currently limited to the area within London’s north and south circular roads but is due to be extended to cover the whole of the capital from August 29 when it will expand to border areas of Buckinghamshire, Essex, Hertfordshire, Kent and Surrey.
Drivers of vehicles that do not meet minimum emissions standards are charged a £12.50 daily fee for entering the zone.
According to the Sunday Telegraph, Whitehall officials are now examining whether Mr Khan has exceeded his powers under the Greater London Authority (GLA) Act of 1999.
The Act gives the government the power to veto proposals by the mayor that are "inconsistent" with national transport policies and "detrimental" to areas outside Greater London. However, the powers have never been used before.
Paul Scully, Minister for London, said: “There are various avenues to look at in the GLA Act. It says the Government can step in and veto anything that is in contravention to the national strategy.
“Does the Ulez expansion affect people in other parts of the country? You can make the argument that it does. It affects a whole load of people in Surrey, Kent and Hertfordshire who didn’t get a say on it. It is taxation without representation.”
Mr Khan has faced a backlash after announcing an expansion of the scheme, and five Conservative councils have joined together to launch a judicial review into his plans.
The five councils said they will challenge the Ulez expansion in the High Court on the grounds that "relevant statutory requirements" were not complied with, expected compliance rates in outer London were not considered, and the proposed scrappage scheme was not consulted on.
They will also claim the overall consultation process was not properly conducted and there was a failure to carry out a cost-benefit analysis of the plan.
Leader of Hillingdon Council Ian Edwards said: “Ulez is the wrong solution in outer London as it will have negligible or nil impact on air quality but will cause significant social and economic harm to our residents. We believe Sadiq Khan’s decision to impose this scheme on outer London boroughs is unlawful.”
A spokesperson for the Mayor of London said: “These claims are desperate nonsense. The Secretary of State could only use this power after changing national policy to prevent all cities charging drivers based on their emissions.
“Ministers have directed numerous UK cities to introduce clean air zones, and the Government is under clear legal obligations to tackle air pollution. The Mayor has received no suggestion from Government that they have any intention to renege on these commitments.”
An ally of Sadiq Khan added:“Sadiq was directly elected to run London by millions of Londoners, while the current Prime Minister was selected by a handful of Tory members.
“Once again the Tories are demonstrating that they are not serious when it comes to tackling air pollution and the climate emergency. Instead of making empty threats and trying to condemn Londoners to live with poisonous air that’s damaging our children’s lungs, they should match Sadiq’s contribution to a scrappage fund and start taking national action to tackle the climate crisis.”