Treasury sources confirmed last night that the Government believed Britain was making its contribution with the Budget decision to impose 17.5 per cent VAT on domestic fuel.
'It is not ruled out, but the Government has always made it clear that it is not necessary or appropriate,' a spokesman said.
'Without prejudice to the council, the tax measures in the Budget make it less likely that such a tax will be needed to meet the CO2 emission targets. The Government will be looking at ways of closing the gap to meet the Rio (Earth Summit) target.'
The carbon tax proposal was announced last May, after the commitment to stabilise CO2 emissions in 2000 at 1990 levels.Reuse content