Osborne tears up key countryside protection and green energy project

Two major retreats on the environment formed part of the economic growth plans announced by the Chancellor, George Osborne, in his Autumn Statement today, raising fresh questions about David Cameron's pledge to head "the greenest Government ever".

In one, Britain's toughest wildlife protection laws, which stringently restrict economic development in environmentally sensitive areas, will be reviewed and potentially slackened, while in the other, much of £1bn set aside for developing Carbon Capture and Storage (CCS), the key technology in the fight against global warming, will be released for other projects.

Rumours of the announcements, which both stem from Mr Osborne's Treasury, were already provoking protests last night. They are likely to reinforce the picture of Mr Osborne as the leading anti-green figure in the cabinet.

Whitehall sources confirmed that a review would be made of the Habitats Regulations, which transpose two very strong EU wildlife directives, the 1979 Birds Directive and the 1982 Habitats Directive, into British law. The regulations make damaging developments on prime nature sites virtually impossible, and have long been criticised by parts of the business lobby.

The review will be of the way the regulations are implemented, rather than a wholesale rewriting, which would be impossible without EU consent – but it is clear that the aim would be to slacken their restriction on development.

The potential easing of the wildlife rules would be very much in line with the slackening of the planning regulations, in which the Government is proposing to provide a "presumption in favour of development".

"We have had 17 years of a system which has protected our best wildlife sites, and now that appears to be under threat," said Mike Clarke, chief executive of the Royal Society for the Protection of Birds. "Weakening these regulations will lead to a reign of environmental destruction that we have not seen in a generation."

Criticism of the Government is likely to be equally fierce over what appears to be a raid on £1bn set aside for the development of CCS, the technology aimed at taking carbon dioxide out of power station waste gases and burying it.

Last month plans for the first big CCS plant at Longannet in Scotland collapsed after a row over funding between the Government and the developer, Scottish Power. At the time, the Energy and Climate Change Secretary Chris Huhne told the House of Commons there would be "absolutely no backsliding" on the £1bn which the Treasury had promised for CCS.

However, the Chief Secretary to the Treasury Danny Alexander revealed yesterday that the funds would no longer be ring-fenced for climate projects. "We're launching a new competition to provide £1bn for CCS but that competition, obviously, is going to take longer, so much of the money that we'd allocated to spend in this Parliament we've now reallocated to different sorts of projects," he told the BBC.