The report, on future energy prospects, was commissioned by the Prime Minister, Tony Blair.

A final draft, seen by BBC News Online, calls for a much bigger role for renewable energy. It also recommends keeping open the option of nuclear power to meet the country's needs.

The energy review is the work of the Cabinet Office's Performance and Innovation Unit (PIU).

It was asked to examine the long-term prospects for energy options, taking account of the need for significant carbon reductions and the energy security of the UK. The leaked version is the final draft, but it may still be amended.

The authors say they had to consider the implications for energy policy following a report from the Royal Commission on Environmental Pollution. It said the UK would have to make substantial cuts in carbon dioxide (CO2) by mid-century to be part of the global coalition on stabilising atmospheric CO2 concentrations.

Among the PIU review's main points are:

• "a strong likelihood that the UK, with other developed countries, will need to make very large carbon reductions over the next century"
• "addressing carbon emissions is likely to be the key task of energy policy"
• "deep carbon cuts are possible at a cost which is bearable, but we should be creating new low-carbon options now"
• the government should create economic instruments that bring home the cost of carbon emissions
• "a step change in energy efficiency is needed"
• renewable energy targets should be expanded to 2020.

Its report said: "Credible scenarios for 2050 can deliver a 60% cut in CO2 emissions, but large changes would be needed both in the energy system and in society.

Daunting prospect

"One opportunity stands out: there is scope for a substantial improvement in energy efficiency.

"Yet even if this improvement can be achieved, and even if the electricity system was to produce no carbon whatsoever, a 60% cut could only be met if there were an associated shift away from oil as a means of powering future vehicles, probably towards hydrogen. This shows the scale of the challenge.

"The analysis for 2020 shows that significant carbon reductions are possible even in this timescale."

The draft suggests a programme for improving domestic consumers' energy efficiency by 20% by 2010, and by a further 20% over the next decade.

On renewable energy, it says the existing target, that 10% of electricity should come from renewable sources by 2010, "is by no means in the bag".

It proposes that by 2020 renewable energy like wind turbines, wave and solar power should be supplying about 20% of the UK's electricity. It thinks this could add about 5-6% to domestic electricity bills.

Concern may lessen

The review acknowledges the public concern over nuclear power, but says it thinks ministers should keep the option open in case both popular and commercial support for new nuclear power stations emerges.

It says: "Public acceptance would need to be built on an open and transparent public debate."

The review is due to go to Mr Blair by the end of December, after it has been approved. The final draft was obtained by a London newspaper, the Financial Times.