Subsidies for wind farms should be cut even further than planned, the Treasury has suggested.
George Osborne, the Chancellor, is said to be fighting Ed Davey, the energy secretary, for a deep cut in public support for onshore wind turbines.
The Coalition last year proposed cutting the subsidy for onshore wind farms under the Renewable Obligation scheme by 10 per cent.
Mr Osborne is now said to be pushing for the reduction to go much further, with subsidies being cut by up to 25 per cent.
The ROC scheme adds a levy to household electricity bills, money that is then passed on to renewable energy operators.
The Department for Energy and Climate Change confirmed that subsidy levels are set to fall.
“It is vital that our support for renewable electricity both encourages investment and represents value for money for consumers,” the department said. “The government will publish the new support levels shortly.”
Cutting subsidies would be popular among Conservative MPs. More than 100 MPs wrote to David Cameron earlier this year calling on the Prime Minister to limit the growth of onshore wind generation.
Mr Osborne has seen his reputation damaged by his Budget in March, and is looking to rebuild support with his part.
Juliet Davenport, chief executive of renewable electricity supplier Good Energy accused Mr Osborne of putting his personal ambitions before Britain’s energy needs.
“This is a reckless act of political opportunism by a chancellor keen to boost his popularity among his backbench MPs,” she said.
Supporters say onshore wind is vital if Britain is to avoid dependence on expensive imported energy sources like gas. Conservative MPs say wind turbines – which can be up to 450ft tall – are unsightly and inefficient.
The Liberal Democrats are strong supporters of renewable energy including wind power.
Nick Clegg, the Deputy Prime Minister, has clashed repeatedly with Mr Osborne in Cabinet meetings over environmental issues, reminding the Chancellor that the Coalition is committed to being “the greenest government ever”.
In opposition, David Cameron stressed his personal commitment to environmental issues, and the Conservatives adopted an election slogan urging voters “Vote blue, go green”.
Mr Osborne has never been as convinced of the environmental cause as his leader, and the economic downturn has bolstered his scepticism.
Supporters say he is rightly prioritising economic growth above environmental targets.
At the moment there are just over 3,000 wind turbines onshore and more than 500 offshore in the UK.
The Coalition’s Renewable Energy Roadmap suggests ministers want to increase the capacity of onshore wind by two and a half times and offshore wind by 2020 and ten times