Lord Smith, the former cabinet minister and chairman of the Environment Agency, will today call on the government to follow US President-elect Barack Obama and launch a multi-billion pound "green new deal" to boost clean energy and create jobs.

Speaking at the annual conference of the agency only hours before Alistair Darling, the chancellor, announces his tax cutting and public spending package, the former culture secretary will call for a comprehensive long-term strategy to cover investments in renewable energy, green technology, energy efficiency and developing new technologies liked carbon capture and storage.

His speech comes as Ed Miliband, the climate change secretary and Hilary Benn, the environment secretary, have been pressing Gordon Brown and the Treasury, for a big boost for green policies in the pre-budget statement today. The signs are that they have only been partially successful.

Today's announcement is set to include a boost for job-intensive home insulation programmes which could create 10,000 or more jobs through lagging lofts and installing other energy saving measures. It will also include upgrading of council and housing association homes. Some extra money is expected for flood protection measures. What appears to be missing is the implementation of an overall coordinated strategy across Whitehall, beyond pressure from the Cabinet Office for more green procurement orders by government. This is despite pressure from Miliband for a coordinated approach from developing hybrid cars to boosting renewable energy from wind farms to solar power.

Two major oil companies with interests in developing renewable energy - BP and Shell - have recently pulled out of major wind farm and solar projects in the UK - to develop renewable energy schemes in the United States, where big subsidies were made available by George Bush and are to be extended by Barack Obama. Both comapnies have complained about the difficulties of obtaining planning permission and lack of tax incentives for renewable energy.

Lord Smith will say today that the government should go ahead with major wind farms, solar power, tidal barrages and coal fired power stations with carbon capture equipment as part of a massive renewable energy programme. He wants more incentives for energy efficiency homes and businesses, greater use of combined heart and power programmes and new feed-in tariffs to help householders develop sustainable energy which can be fed into the national grid.

Lord Smith said: "We must hold our nerve and invest in green technology despite the current pressures on the economy. We should take the lead on developing carbon capture so we can develop new industries that create new jobs."


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