BUDGET CUT LEAKED TO PRESS

The intentions of the UK treasury to halt all state research and development in Britain on non nuclear technologies -- including renewables -- have emerged in a letter leaked to the press. The letter was sent by the former chief secretary to the treasury, Michael Portillo, to Michael Heseltine, president of the Board of Trade.

In the letter Portillo criticises the Department of Trade and Industry (DTI) for failing to make substantial cuts in its budget. Portillo, who has since been promoted to the Department of Employment, identifies seven areas of DTI spending from which he believes the government should consider withdrawing -- among them energy research. The government is funding renewables R&D to the tune of £20 million this year.

The DTI renewables budget has been reduced progressively since the work of the former Department of Energy was absorbed into the DTI. An energy paper on renewables, published in March, emphasised the government's "market enablement" strategy for renewables. This is seemingly being adopted at the expense of the government funded research and development needed for continued progress in the long term. As technologies progressively become competitive, the DTI's renewables budget decreases.

The hectoring tone adopted by the more junior minister in his letter is unlikely to strike a responsive chord in Heseltine. If anything, it is more likely to make him stick to his guns and refuse to give an inch on further cuts in spending, some DTI insiders believe.