Funding for solar and offshore wind to be cut

Chief Secretary to the Treasury Danny Alexander described the shift in subsidy as "a rebalancing" and said overall spending would not change.

Further details of government’s plans will be revealed next week in a speech addressing £375bn of infrastructure spending over the coming decades.

Alexander says that installation of solar and onshore wind is not cost effective, and developers are looking at ways of installing them more cheaply.

Sources from both coalition parties said there had been so much investment in onshore wind and solar energy that they no longer needed so much state support.

In contrast, they said, offshore wind sources still needed more subsidy to encourage long-term investment.

Speaking on Radio 4’s Today programme, Danny Alexander said: "I believe passionately in meeting this country's obligations on tackling climate change and meeting environmental commitments, but we should be doing so in the most cost-effective way we can."

But, for Labour, Shadow Chief Secretary to the Treasury Chris Leslie told BBC Radio 5 live: "They're just chopping and changing all the time – very bad for stable, long-term investment."

Earlier this week, Tim Yeo, Chairman of the Commons Energy Committee, warned the cuts could open the door to a further attack on green levies, which make up less than 10% of energy bills.