The Government is expected to duck one of the key energy issues facing industry next month by failing to set out ways to boost Britain’s gas storage capacity, The Times has learnt.

Industrialists had hoped that a White Paper, due on May 17, would set out a package of measures to stimulate the building of desperately needed additional storage facilities.

But it is thought that the issue has been put on ice because ministers at the Department of Trade and Industry have not decided what market mechanisms should be used.

Industrialists say that the lack of action could trigger an energy shortage in a bad winter, with prices rocketing as they did 18 months ago.

The failure leaves Britain’s energy policy looking threadbare and comes only months after Greenpeace successfully challenged the Government over failing to consult on plans for new nuclear power stations.

Gas storage is increasingly crucial to Britain’s energy needs because the country is moving to become dependent on fuel imports as the North Sea becomes exhausted. But the legacy of being able to rely on the North Sea means that the country has very little storage capacity.

Only a streamlining of planning procedures, in keeping with the Government’s general move to speed planning approvals for large projects, is now expected to be outlined in the White Paper.

Roger Salomone, energy adviser with the EEF manufacturers’ organisation, said: “We will be very disappointed if gas storage isn’t properly addressed. If it is missed out in this review, how many reviews are we going to have to have? Storage will be a very big issue if we have a harsh winter.”

The Government has admitted that there is not sufficient gas storage capacity. Last year Alistair Darling, the Trade and Industry Secretary, put pressure on local authorities to grant planning permission for new storage by saying energy companies could emphasise the national need for their facilities. However, he does not have the power to instruct councils to allow projects.

A few months after Mr Darling emphasised the national need for new storage, a scheme planned for Caythorpe, near Bridlington, was blocked. It is now facing a public inquiry.

The energy White Paper could deal another blow to business through the extension of emissions trading schemes. The EEF is concerned that a move to include smaller businesses in emissions trading could be applied to businesses with as few as 50 employees. Mr Salomone said: “We are concerned that this could be using a sledgehammer to crack a nut.”

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