Rishi Sunak has been urged to slap a windfall tax on "polluters who are harming our environment" and not on green energy producers.

It comes as reports suggest the Chancellor could soon impose an emergency levy on all electricity generators, including wind farms, not just oil and gas giants.

The news that Treasury officials were investigating a possible windfall tax on more than £10bn of excess profits to help with the UK’s cost of living crisis saw shares in British power firms plummet. 

Drax, Centrica and SSE were down between 11 and 19 per cent, heading for their worst day since the start of the pandemic. 

The plan to target all electricity generators goes far beyond Labour’s call for a one-off levy on North Sea oil and gas producers.

According to the paper, a government insider said "North Sea oil and gas producers are only half the picture. The other half is that high gas prices have led to some pretty substantial windfall profits for all electricity generation."

A spokesperson for the Scottish Greens said the UK Government needed to focus on oil and gas firms. 

"What we need is a rapid expansion of investment in renewable energy. A windfall tax should fall on the polluters who are harming our environment and hitting households with skyrocketing bills," they said.

Reports suggest there is a disagreement, with the Prime Minister sceptical of the tax. 

Mr Johnson said on Monday that “no option is off the table” but added: “I’m not attracted, intrinsically, to new taxes.”

He told broadcasters: “As I have said throughout, we have got to do what we can, and we will, to look after people through the aftershocks of Covid, through the current pressures on energy prices that we are seeing post-Covid and with what’s going on in Russia and we are going to put our arms round people, just as we did during the pandemic.”

He said there was “more that we are going to do” but “you’ll just have to wait a little bit longer”.

Mr Sunak has expressed reluctance about backing a windfall tax, but he has acknowledged the need to be “pragmatic”.

Meanwhile, UK companies servicing oil and gas operators have urged the Prime Minister and the Chancellor against enforcing a windfall tax, in an open letter.

In the letter, issued on Tuesday by trade body Offshore Energies UK (OEUK), which represents more than 400 companies in the sector, signatories warn that the industry is only in the early days of a recovery, after suffering significant losses in recent downturns.

The letter says: “A one-off windfall tax on energy producers will not sustainably help consumers and will only further reduce investor confidence in the UK, the ripple effect of which we will feel for many years to come.

“And it will do nothing to address the cyclical nature of an energy system linked to global supply and demand, with the UK becoming much less attractive to investors who will look elsewhere for the long-term stability they require to progress major energy projects.”

It went on to say any “surprise windfall tax” risks operators – big and small – scaling back their investment plans in response, which could have an impact on jobs.

The letter says: “The ramifications of any halt in investment will be felt throughout the supply chain, through jobs, and the communities this industry supports, both directly and indirectly.

“For the tens of thousands of jobs this industry supports, the impact of a windfall tax will be even greater in the long term.

“This is not least because it follows a downturn felt especially hard by the supply chain side of the industry, with thousands of manufacturing roles lost up and down the country.”

OEUK chief executive Deirdre Michie added: “After significant downturns which saw the offshore energy industry lose thousands of jobs, we need to encourage investment in cleaner energies and the sector which supports it.

“This industry is committed to supporting the country’s energy security, economy and net zero ambitions – now is the time for us to work together to drive action.”