The government and the "Big Six" energy companies are this afternoon expected to hammer out the final details of a deal that will see investment in domestic energy efficiency programmes increase by up to 30 per cent over the next three years.

The deal will increase the amount energy firms are required to pay into the government's carbon emissions reduction target (Cert) free insulation scheme by around £1bn to £3.8bn. However, it is unlikely to appease trade unions and Labour backbenchers who yesterday reiterated calls for a windfall tax on energy firms to fund increased winter fuel payments.

According to reports, the "Big Six" - Centrica, EDF Energy, Scottish and Southern Power, E.ON and Npower - will increase their contribution to Cert by 20 per cent, while an extension of the scheme to include for the first time independent energy producers such as Drax and British Energy will take the total increase in funding to 30 per cent.

Speaking at a dinner for the Scottish CBI last week, Gordon Brown insisted that improvements in energy efficiency represented the best means of tackling long-term increases in fuel bills.

However, labour shortages and rising demand for the free insulation offered under the Cert scheme mean that the increase in funding is unlikely to make much of a difference this winter, a fact seized upon by delegates at the Trade Union Congress conference yesterday.

Speaking at the conference, Tony Woodley, the joint general secretary of Unite, warned that the government's proposals would fail to address rising energy bills in the short term. "This can't be addressed by lagging the loft, as some crackpots around the prime minister have suggested," he said. "Without help with fuel bills now, we'll be lagging the coffins of the elderly if we have a cold winter."

He urged the government to impose a windfall tax on energy companies that have recorded record profits in the last year while energy prices have climbed.

However, chancellor Alistair Darling appeared to again rule out a windfall tax, arguing that the energy companies needed stable profits to underpin investment in both energy programmes such as Cert and the development of new renewable energy capacity.

In related news, the Treasury hit back at critics of its failure to ring-fence revenue raised through the Non-Fossil Fuel Obligation (NFFO) for investment in renewable energy projects, insisting that it has spent far more on alternative energy programmes than it raises through the scheme.

The NFFO preceded the government's current Renewables Obligation (RO) as the primary means of incentivising renewable energy developers and worked by giving developers long-term energy purchasing contracts at above-market rates.

The scheme was retired in 2002 when the RO came into force, but the Non Fossil Purchasing Agency, which was set up to run the scheme, continues to buy renewable energy under the original contracts before selling it on under the new system, together with the Renewable Obligation Certificates (ROCs).

According to reports in The Guardian at the weekend, rising energy prices mean that the difference between the price at which the Agency buys the energy and the amount it can fetch for it on the open market is widening, leaving the Treasury with a substantial windfall.

The paper claimed that the Treasury has already taken £585m out of the scheme, with another £218m being held in the scheme's account. A further £200m is expected to be raised this year, taking the total sum raised to £1bn.

The revelation prompted fresh calls from the both the renewables industry and the energy giants for the fund to be ring-fenced and ploughed back into renewable energy projects.

"We were pushing for changes to the NFFO to be included in the energy bill, but the government batted away the proposal," said Leonie Greene of the Renewable Energy Association (REA). "There are any number of ways that this money could be used to fund renewables and it is wrong that it is just going into the general pot."

A spokesman for the Treasury defended its decision not to ring-fence the cash, arguing that the government's investment in renewables "far outweighs" returns from the NFFO.

"The Government has committed around £1.5 billion of support on the research, development and production of renewable and low-carbon technologies," he said. "On top of this the Renewables Obligation should provide £1 billion a year of support to renewables by 2010."

The criticism of the NFFO is the latest in a series of attacks on the Treasury's refusal to ring-fence or hypothecate revenue raised from green taxes for the use in environmental programmes. Earlier this year, for example, the CBI issued a plea for the government to ensure all the money raised through the auctioning of carbon credits under Europe's emissions trading scheme is re-invested in green business support programmes.

The government has consistently resisted such calls, arguing that hypothecated taxation denies it the flexibility that is required to adapt to unexpected changes in the economy.