SLASHING funding for Britain’s largest home insulation programme would be a “short-sighted act of betrayal,” fuel poverty campaigners warned Rachel Reeves today.

The Chancellor is considering cuts to the ECO scheme to pay for an up to £170 reduction in average bills as part of a multibillion-pound energy support package to be announced in the Budget, according to the Guardian.

The prospect of funding reductions been condemned by both environmental and anti-poverty campaigners and Energy UK, which represents the sector.

End Fuel Poverty Coalition co-ordinator Simon Francis warned that the suggested 40 per cent cut to the £21.7 billion energy efficiency funding over five years would harm “the very efforts that would help to bring down bills in the long term and help end the suffering of people living in cold, damp homes.

“Any cuts to the Warm Homes Plan or other programmes to improve housing conditions would be a short-sighted act of betrayal by the Chancellor,” he added.

Mr Francis said Ms Reeves appeared to be “listening to the wrong people” after Unite research published this week showed that profiteering adds three times as much to average bills as green levies.

“Given that between a quarter and a third of the average energy bill is profit for different parts of the energy industry, the Chancellor should look at how the windfall tax could be improved, rather than giving tax breaks to energy firms as she is being lobbied to do,” he said.

350.org campaigner Matilda Borgstrom branded the plans a “reckless attack on ordinary people.”

“Scrapping insulation support will make homes colder and bills higher in the long run, while the Chancellor refuses to tax billionaires or polluters who profit from climate chaos,” she said.

Energy UK chief executive Dhara Vyas said that “hijacking” the warm homes plan’s budget and “effectively abandoning its original purpose would be a short-sighted and disastrous move” that could jeopardise billions of pounds of investment companies have put on hold.

Ms Reeves is also weighing up cuts to other levies, such as the renewable obligation certificate programme, which is currently rising in line with retail price index rate of inflation but could be tied instead to the lower consumer price index rate.

The Treasury declined to comment on Budget speculation.