Mr Darling explained: "Each inefficient boiler adds over £200 to household bills and one tonne of carbon to the atmosphere.” As a result, the boiler scrappage scheme – which is similar in format to the existing scheme for old cars – will see householders compensated £400 for trading in their old boilers for greener, more efficient models.

Dave Lacey, Commercial Director for Vaillant (UK & Ireland) said: “We have seen how successful the car scrappage scheme has been and are looking forward to the boiler scrappage scheme following suit. It can only be beneficial to homeowners, installers and suppliers alike, aiding the environment while simultaneously stimulating the heating market.

“With Ofgem predicting that energy costs are due to rise again in 2010, end users can counter this price rise by utilising this scheme to replace their existing boiler with a high efficiency model. Replacing a boiler that is over 15 years old with a greener model could actually save them as much as £310 per year and the additional benefit of the £400 grant makes this proposition even more attractive.”