Senior Conservatives are reported to have held talks with energy companies and believe they have secured agreement that if the largest levy, the Energy Companies Obligation (ECO), is removed.
The move would lead to immediate cuts in prices of up to seven per cent would be announced. A deal, which would allow average saving of as much as £75 a household, could be struck before Christmas.
New taxation to pay for green schemes are being considered as part of a deal to cut household energy bills, it has been reported.
According to a report in the Telegraph, the taxpayer could be asked to pay for two of the environmental schemes that are currently paid for through a levy on electricity and gas bills.
Energy suppliers have told ministers the levies have pushed up household bills — for which they and the Government have been severely criticised.