A UK Government minister has dismissed a proposals by ScottishPower chief executive Keith Anderson to freeze energy bills for two years through a taxpayer-supported £100bn fund.
Armed Forces Minister James Heappey said that the £100bn loan scheme to stop energy cap rises will not help people who need the most support with the cost of living crisis.
ScottishPower's chief executive Keith Anderson's plan involves creating a deficit fund underwritten by government which would have to be paid back through bills over a ten to 20 year period.
He says the fund would be made up of the difference between what people pay now and how much it actually costs to supply homes with gas and electricity to "help people in the here and now".
He has said the scheme would allow government to buy time over the next two years and speed up investment in cheap green energy.
It comes as the market regulator Ofgem is on Friday expected to raise the energy price cap by over 80% from October with multiple analysts predicting go from £1971 to £3600.
Mr Anderson presented his plan as he attended a special summit by the First Minister Nicola Sturgeon on Tuesday to discuss what can be done to mitigate the impact of soaring energy bills.
The Scottish Government said the summit involving energy companies and advice organisations reached a consensus that the energy price rises should be scrapped so that a plan is put in place to fund a bills freeze.
He had said the plan was being looked over by Business Secretary Kwasi Kwarteng - who is rumoured to become chancellor if Liz Truss wins the Tory leadership.
The proposal has the the backing of fellow Big Six energy supplier EDF, with its managing director saying the industry needed more support from the government.
But UK armed forces minister James Heappey said the huge sum would not be the best way through a winter of price hikes.
"These are eye-watering amounts of money... I don't think a universal freezing of everybody's energy bills really helps to get taxpayers' money into the bank accounts of people who need it the most.
"That's why I think that the more targeted packages both leadership candidates are proposing are probably the better solution.
"What everybody needs to know… is that the government of the United Kingdom is going to help them with the cost of living.
"There is lots that has already been done, but I know that it will be the first priority of the new prime minister to make sure the government does more to help them through the really expensive winter that lies ahead."
Around 1.5m Scots households saw their energy bills rise in April after Ofgem hiked the bills price cap by the biggest increase yet. From April 1, the three in four customers on default tariffs paying by direct debit saw an increase of £693 from £1,277 to £1971. The rest who are on prepayment meters - and tend to be among the most vulnerable - saw a rise of £708 from £1,309 to £2017.
The £100bn cost was ScottishPower's best estimate of the difference between what it cost to provide energy to consumers and the present price cap.
Mr Anderson had indicated the fund, that he first proposed back in April, could be paid off by the rest of customers who can afford their bills or the government could partially fund it.
Once bills had returned to more affordable levels, the price cap would be replaced with a social tariff, ensuring the most vulnerable in society are paying less.
Mr Anderson said action was needed as predictions for future price cap rises were "off the charts".
US bank Citi predicted that that the energy bills price cap would be raised to £4,567 in January and then £5,816 in April, compared with the current level of £1,971 a year.
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