Desperate steel, chemicals and glass factories today pleaded for tax breaks to help them cope with soaring energy bills - as Boris Johnson prepares to sign off hundreds of millions of pounds in loans to keep them afloat.
Energy-intensive businesses insisted cutting taxes and levies was more important than a bailout, after an extraordinary bout of wrangling in Whitehall.
Mr Johnson appears to have sided with Business Secretary Kwasi Kwarteng following his spat with Chancellor Rishi Sunak over the need for government support.
A package is now due within days, but rather than handouts or a price cap on industrial energy costs, it is expected to come in the form of loans.
The move could raise concerns that the government is merely kicking the can down the road, as firms will have to repay the costs later when energy prices have settled down.
The Treasury is said to have been alarmed at the prospect of doling out more cash, warning that 'demands simply increase' when sectors know the Chancellor is involved in the process.
Mr Sunak is due to deliver a crucial Budget in a fortnight as he scrambles to balance the books in the wake of the pandemic.
Companies hit the panic button after wholesale gas prices rocketed amid the global recovery. The huge increases have had knock-on impacts across the whole economy - with energy suppliers going bust and shortages of CO2 after fertiliser plants temporarily shut down to avoid operating at a loss.
The situation has been compounded by supply chain disruption caused by Covid and spiking demand, with a shortage of HGV drivers in the UK leading to petrol stations and supermarkets struggling to get deliveries.
Panic buying has also been a massive issue, with petrol stations being emptied by frantic motorists even though there is no supply shortage in the country as a whole.
Although many economists believe the disruption will ease over the coming months, there are fears Christmas will be blighted, food prices will rise, and inflation could spiral out of control if it gets embedded in wages.
That in turn would hammer home-owners by driving up interest rates and increase the costs of servicing the government's £2.2trillion debt.
Ministers have pointed the finger at Russia for escalating the gas price crisis, saying Vladmir Putin is controlling supplies to bully Europe. Oil prices are also now starting to rise as industry around the world awakes following the Covid shutdown.
Prime Minister Boris Johnson is preparing to sign off a bailout worth hundreds of millions of pounds for major industries hit hard by the energy crisis
Mr Johnson is understood to have been convinced that sectors including steel, chemicals, ceramics and paper need short-term help.
After officials at Mr Kwarteng's department held emergency talks with industry leaders yesterday, the Business Secretary submitted a proposal to Downing Street and the Treasury.
It is understood this stops short of a cap on wholesale prices – which a number of industry leaders have been asking for – but does advocate a short-term subsidy solution.
Industry leaders had warned that factories could close within days without help to cope with spiralling wholesale gas prices.
But Richard Leese, of the Energy-Intensive Users Group that represents the industry, said that cash
