Energy suppliers were granted a reprieve from the threat of government action to cut gas and electricity bills but Alistair Darling warned he would legislate “as necessary” to secure extra help for people using prepayment meters or on low incomes.

Yvette Cooper, the chief secretary to the Treasury, and her officials had been in intensive talks with the industry in the days leading up to the Budget in the hope of securing agreement to a package that could have been announced on Wednesday. The talks continued until Monday.