Households should be offered incentives such as stamp duty or council tax discounts for boosting energy efficiency, MPs have suggested.

New incentives should be considered as the Government's flagship "green deal" scheme to encourage households to become more energy efficient has been a "failure" in its first 18 months, the Energy & Climate Change Committee said.

A report by the committee said the green deal, in which providers meet the up-front costs of installing efficiency measures and householders pay the money back from savings they make on their energy bills, had been taken up by only 4,000 households.

The main issue with the scheme was cost, with ­households passing standard credit checks often able to get cheaper loans elsewhere, and it only applied to a certain section of the population in a position to take out loans for home improvements.

The MPs said the ­Government needed a clearer and more appealing deal to offer households.

The committee's report said there was a need to consider incentives such as stamp duty discounts or variable council tax rates, to encourage energy efficiency across a wider section of society.

Committee chairman Tim Yeo said: "Stamp duty discounts and variable ­council tax rates could be used to broaden the appeal of energy-efficiency improvements and make them even more of a money-saver for households.

"Extra incentives need to be considered, as the Government's flagship pay-as-you-save finance scheme, the green deal, has only delivered a fraction of the expected benefits so far."