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Osborne angers No 10 by stalling green energy boost: The chancellor is rebuked by David Cameron for failing to rubber stamp new prices that power companies will pay for renewable energy

The chancellor has infuriated No 10 and cabinet colleagues by refusing to endorse a key component in the policy to boost renewable energy.

In an extraordinary move last week George Osborne was rebuked by David Cameron’s aides for failing to come on board for a key green policy.

At a meeting on Monday the prime minister’s most senior official, Jeremy Heywood, gave a dressing down to an Osborne adviser over the chancellor’s failure to rubber stamp the new price that power companies will pay for renewable energy such as solar, wave and wind power.

The prices have already been approved by Cameron, Vince Cable, the business secretary, Philip Hammond, the transport secretary, and Chris Huhne, the energy secretary, and will now go out for consultation. Danny Alexander, chief secretary to the Treasury, and Nick Clegg, the deputy prime minister, also support the pricing structure.

Whitehall sources say Osborne’s delay is threatening billions of pounds of investment in renewable technology. One senior government source accused Osborne of “meddling” and of angering No 10 with his tactics.

Last week Osborne used his address to the Tory party conference to declare war on environmental regulations for “piling costs on to energy bills”.

His words came a day after the prime minister’s permanent secretary had rounded on Osborne’s representative over the delay.

“Treasury officials were asked by Heywood what they were playing at by failing to endorse the prices to allow the policy to go ahead,” said a Whitehall source.

Cable has written to the Treasury urging it to endorse the new rates to provide certainty to investors. The rates had been due to be agreed by August.

The price structure is intended to help Britain meet legally binding targets to source 15% of its energy from renewable sources by 2020.

The Renewable Energy Association is so concerned about the continuing delay that it has now written to the government warning that it is threatening £5.5 billion of potential investment. Last week a key investor pulled out of a £200m plant in Teesside because of uncertainty over policy, according to government sources.

Insiders said the Treasury delay was because of concerns that the prices were too high. Under the renewables obligation, the main mechanism for supporting renewable generation, power companies have to source a proportion of energy from green sources.

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