The Government's new energy bill is likely to leave the UK dependent on gas, environmental groups have warned. The Electricity Market Reform bill was originally conceived to promote nuclear power, but problems with the cost of subsidies and fears about the commercial viability of nuclear generators have led to a number of power companies dropping out.

The chair of the Environment Agency, Lord Smith, is expected to declare his support for shale gas extraction, or 'fracking'.

The former Labour cabinet minister will announce that the environmental concerns about the practice can be mitigated by careful monitoring. He will also lend his support to an expansion of nuclear power in the UK.

Plans to reduce reduce solar panel subsidies are threatening British jobs and renewable energy targets, David Cameron has been warned. In a joint letter to the Prime Minister, 400 industry figures said the sector faced "a bleak future" without support.

The Campaign to Protect Rural England is calling on the Government to reveal how many onshore wind turbines will be built, and their planned locations. The group says its members feel "powerless" to oppose new wind farms "in the face of speculative applications from big, well-funded developers".

Energy companies will build 45 windmills on land owned by the Crown Estate, despite members of the Royal Family having previously spoken out against windfarms. The instillations will bring in an estimated £1m a year in subsidies.

Campaigners have expressed alarm after a panel of government experts recommended that fracking of shale gas should resume in the UK.

Exploration company Cuadrilla had stopped using the technique at a site near Blackpool after a series of earthquakes last year, but the panel says even if the quakes recur, they will not do any structural damage above ground.

The Department for Energy and Climate Change will now consult on the findings and issue guidelines in the coming weeks. Labour said the Government must produce a "robust regulatory regime" to allay safety concerns.

Speaking to the BBC this morning, one of the scientists on the panel, Dr Brian Baptie of the British Geological Survey, said fracking was favourable to coalmining. "Given appropriate guidelines and appropriate monitoring, I don’t see any reason why it shouldn’t go ahead," he said.

But Tony Juniper, former director of Friends of the Earth, expressed serious reservations. Mr Juniper cited a study by Cornell University last year which predicted its impact on climate change would be worse than coal.

He said: "This is actually something that is comparable to coal and in some estimations actually worse."

Elsie Walker, an activist from the Frack Off group that has staged protests at Cuadrilla rigs and fracking conferences in London, said: "This report is a seriously dangerous distraction. People need to understand that the wave of unconventional gas development that is threatening the British Isles will bring with it far greater consequences than a number of small earthquakes."

A number of Tory ministers want to axe the Government's flagship Green Deal, according to the Sunday Telegraph.

Ministers including Communities Secretary Eric Pickles fear that the drive to install energy-efficient technology in homes could hit middle-income voters.

Some Conservatives will be cheered by news that Energy Minister Greg Barker has announced there will be no significant expansion of onshore wind turbines beyond those already planned.

The Government has insisted it will continue with contingency plans for a fuel strike, despite Unite putting an offer to its members yesterday.

The deal to avert a possible strike was tabled last night following long talks between the unions and oil distribution firms. The threat of strike action over pay, employment conditions and safety had sparked panic purchasing at petrol stations earlier this month, fueled by Government advice to stockpile fuel.

Unite's driver representative Nick Dennis called the Government's decision to continue with planning "not helpful".

Union members now have until April 20 to deliberate on the proposal. Both parties have agreed to keep details of the deal confidential.

Iceland's volcanoes could soon be pumping low-carbon electricity into the UK, under new Government plans.

Energy Minister Charles Hendry will visit Iceland next month to discuss connecting Britain to its geothermal energy resources via hundreds of miles of high-voltage cables across the ocean floor. "We are in active discussions with the Icelandic government and they are very keen," Mr Hendry told the Guardian.