How to clear engine faults on BMW E46 with M54 engine

Found instructions here:, thanks to John Davis.

  1. Press the pedal to the floor and keep it there until step 6 below.
  2. Insert the ignition key.
  3. Turn the key to position "2". Position "2" is one position before the car engages and starts.
  4. Wait 10 seconds and then turn the key back to position "0", which is the initial position.
  5. Once again wait 10 seconds.
  6. Then release the pedal.
  7. Then (press the pedal down - or partially - or not at all) and start the car up.

Instructions told how to reset throttle response. However, on my car they allow to clear randomly occuring engine faults which put engine into limbo mode: slow acceleration, no traction control, no cruise control. The problem is also known by funny name "christmas lights on dashboard".

In my case when christmas lights are on the "BMW scanner" tool shows the following errors: