Smart energy meters should be brought in under an accelerated programme, according to John Hutton, the secretary of state for business, enterprise and regulatory reform.

Hutton supports a new scheme proposing that smart meters should be installed in all homes within seven years.

He told The Times that the UK needs to act now to fulfill its commitment to tackling climate change.

"Ten years is just too long," said Hutton.

"The energy-efficiency benefit that meters will bring is really necessary if we are to meet our climate change targets," he said.

The Times reported that Ian Peters, chief operating officer of British Gas, is also backing the scheme.

He said that incentives would be offered to consumers who are prepared to restrict their energy usage to periods of low demand.

British Gas estimates that a full rollout of smart meters across all UK homes will cost £6.1bn, but Peters believes that significant savings will be realised quickly.

In research carried out on behalf of British Gas-owner Centrica, Frontier Economics showed that the scheme would cut total UK power demand by nearly two per cent, equivalent to the electricity produced by two mid-sized power stations.

The Energy White Paper consultation on billing and metering closed at the end of October and the government has until the end of January to respond.

The industry has been calling for the government to provide a mandate for the rollout within 10 years, but to date there is no legal framework or timetable for the rollout.