Funding for heat pump grants is set to be slashed by billions of pounds in the upcoming Budget, in what marks a major blow to Ed Miliband's flagship green initiative. The Net Zero Secretary has reportedly accepted that the Boiler Upgrade Scheme must be scaled back due to mounting pressures on the public finances.

The scheme, which offers homeowners grants of up to £7,500 to replace gas boilers with low-carbon heat pumps, has been a central pillar of Labour's green policy. However, senior Government figures are understood to believe much of the funding has gone to middle-class families who would have installed heat pumps without taxpayer support - prompting questions over its value for money.

One option being reviewed is eliminating VAT on electricity bills, a concept Mr Miliband acknowledged was under discussion in an interview last month.

The Government is additionally anticipated to eliminate the Energy Company Obligation (Eco), a charge that adds about £60 to yearly household energy costs but supports insulation and efficiency improvements for low-income homes.

Although Mr Miliband is reportedly eager to preserve aid for less affluent households, Treasury officials have informed him that any financing for such initiatives must now be drawn from his current departmental allocation.

Consequently, other significant programmes are probably to be downsized, including the Boiler Upgrade Scheme, which is now projected to see reductions amounting to several billion pounds across the coming five years.

The anticipated move would signal the strongest indication so far that the Government is prepared to curb elements of its environmental strategy as public concern rises over the expenses of achieving net zero goals.

Treasury sources are known to have urged Mr Miliband to reduce the programme, while Chancellor Rachel Reeves readies a strictly constrained Budget for November 26.

The Telegraph disclosed last week that a pay-per-mile tax for electric vehicles will start in 2028, highlighting Labour's move toward austerity in its eco-policies.

Sources indicate Ms Reeves and Mr Miliband are collaborating on various changes to green taxes, as the administration seeks to honour Labour's 2024 manifesto commitment to lower household energy bills by £300 - a vow that is still unmet.

The action highlights the increasing political strain on the Labour Government regarding its 2050 net zero pledge.

Kemi Badenoch, the Conservative leader, departed from her predecessors this year by labelling the target "unachievable," while Reform - currently ahead in multiple polls - has frequently mocked the policy.

Mr Tice, Reform's deputy leader, has called it "net stupid zero," contending that average families are being made to bear the burden of an impractical programme.

Climate activists have responded furiously to news of the reductions. Leo Vincent, senior policy adviser at the climate think tank E3G, cautioned: "If this is truly what the Government intends, it is robbing Peter to pay Paul.

"This is a disastrous sticking plaster 'solution' that would let down working families across the country who need the security of predictable and low bills."

The scale of the cuts is expected to be finalised when the Chancellor presents the Budget later this month.