Brown presents fuel package

Gordon Brown has rejected the option of a windfall tax on energy companies in presenting his much-anticipated plans to help people with soaring fuel bills. Instead, the energy providers will be expected to fund a £910m fuel-efficiency programme which will also provide extra money for the poorest households.

The package will offer free insulation to pensioners and poor households, while funding half-price insulation for all. Bills will be frozen this year for 500,000 of the worst off consumers, while cold weather payments will be increased from £8.50 to £25 a week.

At his monthly Downing St press conference, the Prime MInister said, "This is the right approach, giving priority to permanent - not just one-off - changes, with the offer of lasting benefits and fairness for all families, cutting bills permanently every year." Unions, who were demanding a windfall tax on energy companies' profits, reacted with dismay, decribing the proposals as "ridiculous".

Representing the energy companies, David Porter, chief executive of the Association of Electricity Producers, was unable to guarantee that the £910m cost of Brown's "green agenda" would not be passed on to consumers. "It remains to be seen just how much of it ends up on the customers' bill in the long term," he told BBC Radio 4's The World at One.