The Commission will on Wednesday ask member states to change funding rules to allow local authorities to use EU regional funds to pay for energy-saving measures in low-income households. Current regulations restrict funding for household energy-efficiency to the new member states in eastern Europe.

Relaxing the rules would create jobs in the construction and energy certification sectors, reduce the EU’s energy consumption and bringing down heating bills for those worst hit by the recession, the Commission says.

Frauke Thies, of environmental campaign group Greenpeace, said it was an ‘important step in the right direction’.

‘This is a big part of the European move towards using energy more effectively’, Ms Thies said. ‘For low-income households, energy costs are still making up a large share of the domestic budget. These sorts of households might hesitate to make investments in double-glazing or putting in a more efficient boiler’.

According to recent Commission figures, homes account for more than a quarter of total EU energy consumption.

Danuta Habner, the EU’s regional policy commissioner, said it was a ‘win-win measure’.

“This will save energy, cut emissions, bring down fuel bills for the most vulnerable in society and help the construction industry and SMEs in particular”, Ms Habner said. ‘We hope that the Council and the European Parliament will adopt this proposal without delay and that Member States will move quickly to set up schemes to harness this investmen.’

Andris Piebalgs, commissioner for energy, said the move would help European citizens improve the quality of their homes while making a ’substantial contribution’ to climate change and security of supply policies.

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