In the battle to help homeowners make it through the winter, a deal between the government and energy companies to reduce household bills is close to being finalised.

The measures are expected to provide the UK’s poorest customers with better insulation and assistance in finding the cheapest gas and electricity tariffs.

Union leaders have called on Gordon Brown to impose a windfall tax on energy companies’ profits, but the government insist that making homes more efficient is a better long-term solution to cutting bills.

The package of measures is expected to include better insulation of all homes over the next ten years and targeted help for the poorest to ensure they have access to the best fuel deals on offer. As well as this, it is understood that energy companies will also make increased contributions to the government’s carbon emissions reductions scheme.

BBC political correspondent Jo Coburn said the deal has taken weeks, if not months to put together, but may not satisfy union leaders who want government money to go directly to cutting bills.

She added that Gordon Brown hoped the deal would be enough to generate a warmer reception from delegates at the Labour Party’s annual conference in two weeks’ time.

Yesterday, the TUC’s annual conference in Brighton backed a motion criticising energy companies and urging the government to impose a windfall tax.

The “big six” energy firms faced criticism for making £1.6bn last year and raising prices by 42 percent this year.

A report published on Monday suggested almost a quarter of the population will be pushed into “fuel poverty” by the end of next year.

The National Housing Federation said by the end of 2009, 5.7 million UK households will be spending at least 10 percent of their income on energy bills, with average household electricity bills expected to increase to more that £500 per year by 2010, and gas bills to around £900.