Council leaders today called for energy suppliers to pay a £500 million annual charge to help fund a home insulation programme that would lift half a million people out of poverty.

The call comes as energy regulator Ofgem hosts a summit to discuss the plight of people struggling to pay rising gas and electricity bills.

Cllr Paul Bettison, Chairman of the Local Government Association (LGA) Environment Board, said: "Extra money should be provided to lift the most needy out of fuel poverty, especially if it means protecting the elderly and the vulnerable in the cold winter months. But trapping people into dependency on hand-outs will not tackle the causes of fuel poverty or bring about a permanent reduction in greenhouse gases.

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"What we need is a comprehensive drive to insulate every home in the country to cut carbon emissions and lift people out of fuel poverty."

The LGA said the best long term solution for tackling fuel poverty would be to ensure homes were more energy efficient.

The cross party organisation, representing more than 400 councils in England and Wales, proposes that energy companies match pound for pound the £500 million a year contribution householders already make to pay for a national programme.

(CD/JM)