The new meters would mean an end to estimated gas and electricity bills, no waiting in for a meter reader to call, and would allow householders to see how much energy they are using, ministers say.

"The meters most of us have in our homes were designed for a different age, before climate change. Now we need to get smarter with our energy," said energy and climate change secretary Ed Miliband. "Smart meters will also mean the end of inaccurate bills and estimated meter readings."

Some 26 million homes and several million businesses would be involved in the project. The BBC quoted industry sources as saying the estimated cost of the project is 7 billion pounds. The meters will allow suppliers to take readings remotely and allow them to offer more tariffs, which the government believes will encourage more efficient and economical use, saving consumers money and cutting carbon emissions. The government is launching a three-month consultation on the proposals.