The changes, which will be announced next week, will try to stop energy companies that are holding onto offshore acreage and not exploiting the billions of barrels of undeveloped reserves the UK Government believes exists in the region.

While the UK is looking to better exploit its hydrocarbon assets, in the renewable sector, a new report by the Blair Government is urging the increased use of renewable fuels as well as more energy efficient homes.

The Blair Government is looking to have 10 per cent of all produced electricity to come from renewable sources by 2010 in a move that many environmentalists believe will "revolutionise the way we use energy ".