Credit crunch means major schemes with planning approval may not be built unless government steps in to help

Key offshore wind farms will be scrapped without an urgent government handout of £2bn, throwing UK carbon-cutting strategy into disarray.

This was the message of the British Wind Energy Association (BWEA), which wrote to the government last week warning that the recession had undermined firms' ability to finance major projects, according to The Sunday Times.

Wind turbine
British Wind Energy Association called for "quick solutions to today's problems"

Nine schemes, including the £3bn London Array in the Thames estuary and Npower's £2.2bn Gwint y Mor farm off the Welsh coast, have planning permission but have not started construction. The BWEA said soaring building costs and the credit crunch had left a funding gap of around £2bn.

The body said: “The government needs to provide quick solutions to today's problems, and today's problems are the flow of credit. We are concentrating on measures that will aid the projects that need financial closure this year.”

Ideas for government funding are understood to include direct aid through grants or tax breaks, doubling the per-megawatt subsidy that offshore wind receives or distributing the cost of building the offshore grid among all energy companies, regardless of whether or not they have offshore farms.