Reports that the Government is to sign up to ambitious targets for emissions cuts were welcomed as "a much needed boost" to the green agenda by environmental campaigners.
Greenpeace said a "strong intervention" by Prime Minister David Cameron had resolved a fraught battle within the Cabinet over the merits of the far-reaching deal to cut emissions by 50% on 1990 levels by 2025.
A leaked letter last week appeared to expose a row between Lib Dem ministers, with Business Secretary Vince Cable arguing for less ambitious reductions amid concerns the tough targets could harm growth.
But The Observer said Energy Secretary Chris Huhne had emerged victorious and would tell MPs this week that the UK would adopt recommendations made by the Government's climate advisors for a fourth "carbon budget".
A coalition of environmental bodies issued a warning to Mr Cameron yesterday that he risked seriously undermining his pledge to lead the "greenest government ever" if he did not back the targets.
Labour leader Ed Miliband had also seized on the evidence of internal disagreement, writing to the Prime Minister to say failing to agree them would send "a terrible signal" to business and the rest of the world.
"This is good news and a rare victory for the green growth agenda that has been so vehemently opposed by officials in both the Treasury and Vince Cable's Business department," executive director of Greenpeace UK, John Sauven, said.
"The Prime Minister's strong intervention offers a clear signal that the UK is committed to competing with the world leaders in clean tech industries like China and Germany.
"These new legal powers will offer a much needed boost to moves towards a green economic recovery and the focus now must be on raising investment and creating jobs in these clean industries."
Meanwhile, Friends of the Earth gave a cautious welcome to what it termed "encouraging news".
"If David Cameron agrees to all the climate committee's key recommendations it will breathe new life into his pledge to lead the greenest government ever," executive director Andy Atkins said.
Speeding up the the green industrial revolution would create tens of thousands of jobs and help wean the UK off its "costly fossil fuel addiction," he added.
The carbon budget runs from 2023 to 2027 as part of long-term efforts to cut emissions by 80% by 2050.
Protests have been planned outside Liberal Democrat headquarters in London and Downing Street tomorrow, where Cabinet ministers are due to meet to finalise the decision.
The renewables industry has also thrown down the gauntlet to the Government, calling for the right policies to deliver jobs and investment in green technology in the UK.
Last week Danish wind turbine giant Vestas announced plans for a factory in Kent which would deliver 2,000 jobs to the area, but said its proposals needed to be backed by the right political framework.
But manufacturers organisation EEF is urging the Government not to commit to the targets, which it said risked damaging the UK's international competitiveness and economic growth.
The organisation's chief executive Terry Scuoler said the UK was already committed to some of the toughest carbon targets and accepting the fourth budget would sign the country up to unilaterally high goals within Europe, let alone the rest of the world.
He said the Government needed to seek international consensus, and not press ahead without firm evidence that Europe was moving towards higher targets.
"Committing to ploughing a lone furrow without international agreement will damage our economy for little or no environmental benefit," he warned.Reuse content