Gordon Brown today presented £1 billion of measures to help British households cut their energy bills - and joined a chorus of disapproval at a power company executive's 'inappropriate' remark that a cold winter would be good for business.

The measures, part of a wider political relaunch for the Prime Minister ahead of the party conference season, will see up to 11 million households offered free loft and cavity wall insulation in the next few years and others a grant covering 50 per cent of the cost.

In addition, 600,000 of the poorest families will, after a deal with energy suppliers, have lower "social tariffs" by the end of the year. There will also be action to ensure that households on pre-payment meters do not face higher tariffs and, in the event of "severe" weather, a rise in cold weather payments from £8.50 to £25 a week.

Mr Brown told his regularly monthly Downing Street press conference that the package was designed to deliver "a real and lasting change in the way we all use energy".

The package will be largely funded by the six major energy suppliers, who, in return, will not be hit by a windfall tax on their profits, as unionists and Labour leftwingers have demanded.

But the initiative was partially upstaged by a row over a remark from an industry executive, apparently gloating that high oil prices and the prospect of a cold winter leave the large energy companies in a win-win situation.

Asked how a bitter winter would affect already high energy prices, Mark Owen-Lloyd, head of power trading for E.ON UK, told an Ofgen seminar yesterday: “It will make more money for us."

Roger Godsiff, the Labour MP for Birmingham Sparkbrook and Small Heath, described the joke as a very cynical comment that merely shows the contempt that major energy companies have for the general public". A spokesman for the charity Help The Aged added:“Fuel poverty is no laughing matter."

E.ON, which last month raised electricity prices by 16 per cent and gas prices by 26 per cent, was quick to apologise and hint at disciplinary action against the executive. “We are aware of our customers’ difficulties with rising fuel prices and completely understand why people wouldn’t find it funny,” a spokesman said.

The Prime Minister agreed."These were totally inappropriate remarks," he said. "Everyone is aghast at people making remarks like that."

Mr Brown said the Government had considered introducing a windfall tax but decided against it.

He said: “We looked at all possible options of both raising money and the action that we could take and that has been an inquiry that we had over the summer months. Instead of a windfall tax, this is the better way of moving forward.

“The special payments will be made, as a result of laws that we will pass in the House of Commons, by the energy suppliers. For the first time the energy generators will be paying as well as the distributors. The total amount of money raised will be £910 million.

He added: “We want to keep energy bills as low as possible and I do not expect the £910 million that we raise to be passed on to the consumer by the energy companies. I think that’s a very important point to make."

Mr Brown said that he expected six million households to receive free loft or cavity wall insulation under the scheme by 2011. The Government's wider aim is to have all households in the country properly insulated by 2020.

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