Labour has slashed billions of pounds a year from its green prosperity plan in a significant U-turn, claiming that the state of the economy meant that it had become unaffordable.
The saving has been made by radically scaling back an ambitious "warm homes plan" to insulate millions of homes over the next decade.
The decision comes after weeks of pressure on the Labour leadership over the commitment to hit a pledge to spend £28billion a year on green projects by 2029.
Labour leader Sir Keir Starmer said today: "There will be no new further investment on top of the green prosperity fund. The £28billion is stood down so we can focus on the outcomes.
Labour has axed slashed billions of pounds a year from its green prosperity plan in a significant U-turn, claiming that the state of the economy meant that it had become unaffordable
PA
"When we announced the £28billion two and a half years ago interest rates were very low - since then Liz Truss has crashed the economy."
Starmer said it was "ridiculous" to suggest that he had 'flip-flopped' on the policy. He added: "Fiscal rules must come first... We have to to adjust ourselves to the circumstances we find ourselves in."
The original green prosperity plan had committed Labour to insulating 19million homes across the country over the next 10 years.
Under the new plan - costing £23.7billion over five years - just five million homes will be insulated in the first five years of a Labour government.
Starmer said that he was sticking to all of the other public commitments - such as a commitment to green steel - and they would be in the party's manifesto.
Other pledges including as the £8.3billon plan for a new business called Great British Energy and a £7.3billion National Wealth Fund remain in the election manifesto.
The new £23.7billion pledge over five years will funded by £10.8billion from an extension to the windfall tax, closing a loophole on new investment and increased a tax on oil and gas production from 75 per cent to 78 per cent.
The remaining £12.9billion will be funded from borrowing. Rachel Reeves, the shadow Chancellor, said: "When things change we have to adjust our plans too."
Starmer said that shadow Climate Change secretary Ed Miliband had agreed to the plan, saying: "Ed is full signed up to this. We have talked it through."
In a statement Miliband said: "Labour will be fighting the election with a world-leading agenda on climate and energy with every single individual policy already announced now confirmed for the manifesto."
The announcement came on the day when the party's shadow Cabinet had to submit costed proposals for the party's manifesto.
The Conservatives were already attacking Sir Keir for the expected announcement in the hours before it was made.
LATEST DEVELOPMENTS:
Cabinet minister Michael Gove said on social media: "Brave Sir Keir runs away again. The inveterate invertebrate shows he has no plan and there is no principle he won’t ditch.
"He’s the jellyfish of politics - transparent, spineless and swept along by the tide. Far from taking Britain forward, Labour would take us back to square one."
