ENERGY bills could rise as a result of the UK Government's planned revamp of the electricity market, Vince Cable said yesterday, as a Lib-Con deal on renewables subsidy seemed to be edging closer.

During a visit to ETDE Contracting in Edinburgh, the Secretary of State responded to a damning report by MPs that the Coalition's draft Energy Bill could lead to higher bills and less competition.

Asked if the moves could result in higher energy bills, Mr Cable replied: "There is bound to be an element when you get new industries established that it has to be supported by some of the more traditional fuel.

"So yes, there is an additional element of subsidy but what we are trying to ensure is these new technologies are subsidised very quickly so their costs fall and that subsidy element disappears."

The disclosure came as Whitehall sources said the Government's view on subsidies for on-shore wind farms could be made public this week.

A row has been brewing with Ed Davey, the Liberal Democrat Energy Secretary, supporting a 10% cut in the subsidy for renewables with Conservative Chancellor George Osborne pressing for a 25% cut as he favours boosting gas.

Yesterday, it emerged Mr Osborne is willing to agree to the 10% cut – also advocated by the Scottish Government – if Mr Davey will compromise on green energy targets.

In a leaked letter to the Energy Secretary, Mr Osborne urged him to make a clear, strong signal of support for unabated gas up to 2030 and beyond, including a promise that consumers would benefit from falling gas prices.

Meanwhile, the Chancellor came under fire from fellow Tory Tim Yeo, chairman of the Commons Energy Committee, who claimed the Treasury had "never been signed up to the green agenda but this has got much more serious in the past year".

Tom Greatrex for Labour said the Lib-Con squabbling showed Government energy policy was in turmoil. Meanwhile, billionaire Donald Trump is taking his fight against wind farms to Westminster after being asked to appear before a House of Commons committee. The US businessman is opposed to 11 giant turbines planned off the coast of his Aberdeenshire golf resort.