Darling is said to want to deliver an environmentally-centred Budget to tackle climate change and simultaneously boost Treasury revenues to reduce government borrowing.

However, the eco-friendly budget may be designed to take effect in stages, with some reports suggesting Darling may opt to delay the introduction of the "green taxes" on motorists to reduce the risk of Britain sliding towards recession.

The Chancellor may delay a scheduled 2p-a-litre rise in fuel duty until later in the year, with increased revenues from higher oil prices filling the financial hole. This comes after demands for a halt on further tax rises following the release of official figures from the Office for National Statistics that showed a 19.3 per cent rise in the price of fuel over the last 12 months - the fastest since records began. The "showroom tax" and higher vehicle excise duty on gas-guzzling cars are not expected to take effect for another year. It is widely expected the budget will offer incentives for motorists to buy low-emission vehicles. Additionally, the government could announce Britain's first five-year carbon-budget, outlining the steps that should be taken to cut carbon emissions by 60 per cent by 2050.