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The DVLA was demanding £280 to release it -so Mr Taylor grabbed his disc cutter to hack it in half when the clampers came back to tow away the car.
The builder, from Tredworth, then invited them to take the rear half away as it was the only section that was breaking the law.
Five police cars containing ten officers raced to the scene, along with a six-man fire crew, after clampers told police what was happening.
But the police took no action and the disgruntled clampers released the motor and told the dad of three he could keep it.
Mr Taylor had bought the car for just £50 for his stepson and kept it off the road as it needed repairs.
He said: "I had to make a point. The vehicle was totally legal where it was. These people are petty and won't listen to you. It was a drastic step but I stand by my decision."
A spokesman for clamping firm NCP Services, which was operating on behalf of the DVLA, condemned Ian's actions as "dangerous and highly irresponsible."
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