Ministers are proposing that the government attempt to water down the European Union's (EU) proposed target for 20 per cent of energy to come from renewable sources by 2020.

That is according to The Guardian newspaper today, which claims it has attained leaked documents from the Department for Business, Enterprise and Regulatory Reform (BERR), detailing that meeting the target will face "severe practical difficulties" and suggesting that the prime minister begin lobbying his European counterparts to water down the targets.

The newspaper claims that the document - which is a draft copy of business secretary John Hutton's Energy Policy Presentation to the prime minister - warns that it could cost the UK £4bn a year to achieve just a nine per cent share of renewables by 2020.

It adds that meeting the 20 per cent target would require massive investments in R&D and face numerous political obstacles, such as opposition from the shipping industry and Ministry of Defence over expansion of offshore wind farms. It further warns that meeting the target would undermine the effectiveness of the EU's Emissions Trading Scheme (ETS) and reduce incentives to invest in alternative low carbon energy sources such as nuclear power.

According to the newspaper, Hutton is set to advise the prime minister to take the risk of being seen to abandon the UK's leadership position on climate change and begin lobbying the German chancellor Angela Merkel and other EU governments in favour of the targets to set lower renewable goals.

However, a BERR spokesman insisted that The Guardian article was " wrong" and that ministers are "not planning a U-turn on any of our pledges to combat climate change and the Government is not seeking to "effectively abolish " the target for renewable energy agreed by the European Union in the spring".

He added that the department did comment on briefings between ministers and the prime minister, but insisted that like all EU member states the UK is currently in discussion with the European Commission about how the proposed renewables targets should be met. "Meeting the target will be challenging to deliver and will involve costs to all European consumers and industry, so we obviously want to make sure that the system is well designed, cost-effective and practicable," he said.

The renewable energy industry responded angrily to the reports the UK may attempt to dilute the proposed targets and urged the government to stand by the proposed 20 per cent goal.

"It is vital the government retains these targets as they show it is serious about this sector," said Charles Anglin of the British Wind Energy Association (BWEA). "This is a highly competitive market and if the government attempts to water down the targets it will send out the entirely wrong investment signals and that investment will simply go elsewhere."

He also insisted the 20 per cent target was comfortably achievable if the government only removed the administrative barriers that have hampered the development of renewable energy capacity.

"We predict that we can generate a quarter of electricity from wind power alone by 2020 and 10 per cent from other renewables, so the 20 per cent target is attainable," he argued. "But we need the government to remove the policy obstacles within the planning system that are blocking investment."

In related news, the Environmental Audit Committee (EAC) yesterday called on the government to introduce greater transparency to the ETS, claiming that a failure to differentiate between carbon credits bought within the UK and those imported from abroad was undermining the credibility of the scheme.

In response to a new government report on the scheme, EAC chairman Tim Yeo said that while emissions trading schemes could work effectively, more transparency was required in the reporting of carbon credits origins.

"The government should be more open about... the uncertainties and complexities of emissions trading," he said. "The increased accountability this would result in would help to strengthen the foundations of emissions trading. Conversely, a lack of transparency could undermine both the effectiveness of emissions trading and public and financial confidence in it."