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Yes, I too have heard this rumour, the reason they are giving is the new scrappage allowance scheme, if you are getting around £2,000 for an old scrapper against a new car, the bottom of the range smart has to go as there would be no profit in it, so that is why they are thinking of dropping it from the British lineup, but still selling it in Europe, and I presume America, so don't panic.
So for the folks who have been holding onto the old cars because they cant afford a new one will lose the option of being able to take advantage of the scrappage allowance because the low end cost cars will not be available.