Staggered start for Green Bank

Although it may eventually grow into a bank – able to raise debt finance independently through issuing bonds – Huhne said that the institution's introduction is more likely to be "staggered".

In an interview with the Guardian today, he said: "Obviously, if we were to turn around and have the GIB borrowing vast amounts of money tomorrow I can understand that managers of the national debt would be a little alarmed.

"There are phasing issues, there are transition issues...Let there be no doubt that the first overwhelming priority of the government has to be to get the deficit down."

The government is hoping the GIB will attract private investment into renewable energy projects to seed their financing and construction.

However there are still questions over the scale and type of energy projects that may be supported.

The National Infrastructure Plan launched in October pledged to introduce the bank, but said detailed proposals on how it will work in practice will not be published until the spring.