Britain’s big energy companies breathed a quiet sigh of relief today as the Government unveiled a £910 million package of measures designed to tackle fuel poverty.

While the so-called Big Six — E.ON, British Gas, EDF, N-Power, Scottish Power and SSE — will have to stump up the extra cash, they have avoided the threat of a windfall tax on profits, at least for the time being.

The package amounts to a 30 per cent increase of an existing three-year fuel efficiency programme to which they have already pledged to spend £3 billion over three years.

That amounts to just over £300 million a year divided between six companies — a cost that they will be able to absorb fairly easily and which will not significantly affect their profitability.

Moreover, much of the costs will ultimately be passed on to consumers, possibly by delaying any potential drop in bills made possible by a fall in future wholesale energy prices.

There could even be hidden benefits.

Many of the companies — Centrica, for example — have booming home services divisions for which today’s announcement could help drum up new business.

Nevertheless, while the announcement may ease the pressure on them for a while, it is worth remembering that the threat of a windfall tax has not disappeared.

The Government will face renewed calls for one at the Labour Party conference later this month with many union hardliners dissatisfied by today's announcement.

In the event of a leadership challenge to Gordon Brown, it is also possible that a rival candidate could use an energy windfall tax as a platform for support.

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