Margaret Beckett

Margaret Beckett has indicated the government still hopes to reach a deal with the European Commission on pollution emissions by British industry.

The environment secretary faces an uphill task to secure Brussels' approval of plans to lift the amount of carbon dioxide emissions that UK industries are allowed to emit.

Last October the government cited revised projections as the key factor behind a move to lift the emissions limit by nearly three per cent.

But that move needed Commission approval, and ministers in London currently look unlikely to receive it.

In a statement issued on Monday, the Department for Environment, Food and Rural Affairs said it was sticking by that last autumn's national allocation plan (NAP).

The move will increase the total number of UK allowances for the period 2005-07 by 19.8 million allowances to 756.1 million allowances.

"Discussions with the Commission are continuing as the government believes that the proposed amendment to the NAP is compatible with the requirements of the EU emission trading scheme legislation," said DEFRA.

"The government continues to press the UK's case with the Commission and is taking steps to protect its legal position."

In the event that the government is forced to retreat on its revised limits, the department added that any reduction would be achieved by cutting the number of allowances given to the electricity generation sector.

"This should give industry confidence in the government's intentions, and allow them to plan accordingly," said the statement.

Business leaders welcomed the government's intention to hold out against the Commission's call for tighter CO2 limits.

CBI director general Sir Digby Jones said it was "a sensible response to what has become a difficult position".

"Business backs the government to the hilt in its determination to stick to the revised allocation plan and the government is right to clarify its legal options," he added.

"Business is not getting off lightly. Companies are committed to playing their part in reducing greenhouse gas emissions.

"Environmentalists should accept that the revised plan is based on more accurate data and represents a significant reduction in emissions for business."