More money off energy bills for every household under Rishi Sunak rescue plan

Earlier this month, The Telegraph revealed that some people working on the original loan scheme had complained that it was highly complex and difficult to implement.

A political challenge will come in selling a windfall tax on oil and gas giants to Cabinet ministers, many of whom have criticised the idea publicly, and Tory MPs.

Mr Johnson had been holding round-table discussions with leading economists this week to ensure the tax would not deter investment and about the threat of inflation.

He is understood to have decided that “the pain is worth the gain” from the move, despite initial reluctance about signing off a tax rise on some businesses.

The tax is expected to be linked to the amount oil and gas firms invest. “The more you invest, the less you contribute,” said one source familiar with the proposal.

The reaction of Tories, already frustrated by a tax burden at its highest point in 70 years, and companies such as BP and Shell, will be closely watched on Thursday.

Smaller moves that had been considered, such as an extension to the warm homes discount scheme, are expected to have been rejected in favour of the energy bills rebate.

A measure specifically targeting households most impacted by the cost of living squeeze, such as pensioners and people on benefits, is also likely to be in the package.

Treasury and Downing Street spokesmen declined to comment on Wednesday night.

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