THE Coalition Government described Labour's energy prize freeze as a con as it unveiled plans to cut fuel bills by an ­average of £50.

Under the proposals so-called "green" taxes will be rolled back, while homebuyers will be offered £1000 to spend on insulation and other energy saving measures.

Within hours of the announcement a number of the Big Six energy companies had indicated they would pass on all of the savings to households.

Speaking during his trade mission to China, Prime Minister David Cameron said: "Customers in Britain are going to see an average of £50 coming off their bills.

"That's good news for British families, good news for the cost of living and I think that should be welcomed."

However, Labour leader Ed ­Miliband said the Coaliton was using "smoke and mirrors" to try to hide the fact bills would still increase.

The Coalition has been on the back foot over energy costs since Mr Miliband's announcement at his party conference in September that he intended to freeze prices for 20 months if Labour wins the next general election in 2015.

The announcements were an attempt to reclaim the initiative from Labour. The process was complicated by difficult negotiations between the Conservatives and with the LibDems.

From early next year the cost of the Energy Company Obligation (ECO), an insulation scheme, will be reduced in a move that should shave £30 to £35 from bills.

There will also be a taxpayer-funded £600 million rebate on the Warm Homes Discount, which helps those in fuel poverty, saving customer another £12 on average.

Network costs will be reduced, creating a one-off £5 reduction on bills. Homebuyers will be also able to claim £1000 for energy-saving measures when they move into a new property, although up to £4000 will be available for some particularly difficult cases.

Deputy Prime Minister and LibDem leader Nick Clegg contrasted the Coalition's plans with Labour's "con", which he said would see prices hiked both before and after its introduction.

Energy Secretary Ed Davey told MPs the Big Six firms agreed there would be no price increases in 2014 unless wholesale costs increased.

He said: "Energy companies will now make final detailed decisions about how to apply these measures but these cost reductions will ensure that average energy bills are lower in 2014 than they otherwise would have been - on average by £50 per household.

"The major energy companies have now confirmed there will be no need for price rises in 2014 unless there is a major change in wholesale or network costs."

He said the proposals were "real measures based on real facts".

However, shadow energy secretary Caroline Flint said only a price freeze would guarantee protection for customers. She also said that while ministers spent £600m of taxpayers' money and weakened energy giants' green obligations, companies "will still be allowed to put up people's bills this winter".

Consumer Futures, the consumer watchdog, said the cuts would "not make a substantial difference" to millions living in fuel poverty. That view was echoed by David Stewart, policy manager at the Scottish Federation of Housing Associations. He said: "While any attempt to reduce bills is welcome, we believe this is a short term fix that will not help reduce bills or help pull households out of fuel poverty in the medium to long term. The estimated £50 saving comes on the back of average price rises of £120, and so is not going to leave consumers feeling that they are making any savings."

He added that the savings would also mean energy companies would reduce their investment in 'hard-to-treat' houses.

He said: "These types of homes are expensive to heat and require more work to improve energy efficiency. Schemes that would have benefited many in fuel poverty will be placed in jeopardy."