Gordon Brown has signalled a "more ambitious" expansion of Britain's atomic energy programme beyond replacing the nation's ageing nuclear power stations as he warned the world faced a long-term problem of high oil prices.
Mr Brown said it was clear that the country needed to do more than simply replace the current network of nuclear power stations that provide 20 per cent of its electricity.
Earlier this year the Prime Minister gave the go-ahead to a new generation of nuclear power stations, arguing they were needed to replace the current network of reactors.
But yesterday he sparked anger among environmental campaigners by declaring that an expansion of nuclear energy was needed as part of plans to reduce Britain's reliance on oil.
He said: "We want to do more to diversify our supply of energy and that's why I think we are pretty clear that we will have to do more than simply replace existing nuclear capability in Britain. We will be more ambitious for our plans for nuclear in the future."
The Business Secretary, John Hutton, called for a significant expansion of nuclear power in Britain earlier this year, arguing it would offer "breathtaking" opportunities for British industry. The policy could include new or expanded nuclear power stations on the site of current facilities, or it could lead to new sites being built. Ministers have made it clear they will put no artificial cap on nuclear power, arguing it will improve Britain's energy security as well as help tackle climate change.
Mr Brown moved to endorse the move to nuclear as he attempted to reassure motorists angry at the soaring price of petrol and diesel. While he met oil industry leaders in Banchory, north-east Scotland, ministers announced a package of measures to boost production in the North Sea by up to 70,000 barrels a day. But the Greenpeace climate campaigner Robin Oakley warned: "Unless Mr Brown is about to appoint an alchemist to the Cabinet, nuclear power will do nothing to address any concerns over oil."
The Chancellor, Alistair Darling, signalled a potential retreat over planned increases in fuel tax yesterday, saying he would look again at the decision to put 2p on fuel duty from October. But he was immediately accused of creating "economic instability and confusion" by sending out mixed messages. Downing Street moved to dampen speculation about a U-turn over the controversial reform of road tax and said Mr Brown was "not retreating from the green agenda" after campaigners warned him not to bow to pressure to cut fuel duties.
A No 10 spokesman attempted to play down suggestions on Tuesday by Jack Straw, the Justice Secretary, and Mr Hutton that Mr Darling was prepared to give ground on planned increases in road tax. He also gave no hint of movement on planned rises in fuel tax, insisting that the Government had to act to stabilise and reduce the price of oil.
Mr Darling, however, told the BBC that he would revisit the issue of fuel tax before this year's autumn financial statement. "I intend to come back to the issue of the fuel tax increase that will be due this October," he said. "I will do that because I'm very conscious of the fact that people are concerned about the amount of money they are now having to pay out every time they fill up their car."
George Osborne, the shadow Chancellor, retorted: "It's difficult to see how Gordon Brown and Alistair Darling could make the Government's position on road tax and fuel duty more complicated, but today they succeeded. Yesterday's U-turn on the big tax rises on family cars is now apparently off. Pleading with international oil companies to increase production is all well and good but surely the simplest thing that Gordon Brown could do now is say that he will not go ahead with his ill-conceived plans to put taxes up on family cars."