The news source said that up to 11 million British households will be offered free loft and cavity insulation over the next few years, while other households will receive a grant covering 50% of the upgrade cost.

Mr Brown’s energy package includes a deal with energy suppliers to offer lowered social tariffs to 600,000 of the poorest families by the end of 2008. The package will reportedly also ensure that households on pre-paid meters do not end up paying higher tariffs and the hike in cold weather payments from GBP8.50 to GBP25 per week during inclement weather.

There are voices calling for a windfall tax on the six major energy suppliers, and the prime minister’s energy package is understood to be a compromise deal in return for not imposing the tax.

Mr Brown said: The special payments will be made, as a result of laws that we will pass in the House of Commons, by the energy suppliers. For the first time the energy generators will be paying as well as the distributors. The total amount of money raised will be GBP910 million.

We want to keep energy bills as low as possible and I do not expect the GBP910 million that we raise to be passed on to the consumer by the energy companies. I think that’s a very important point to make.