However, it will offer homeowners who choose to switch early a £5,000 “boiler upgrade grant”, The Telegraph understands. The scheme is likely to provoke criticism because heat pumps currently cost £10,000 and concerns have arisen over whether the technology warms homes to a sufficient degree and whether it works appropriately in draughty older houses and some flats.

A funding pot worth hundreds of millions of pounds has been agreed between Kwasi Kwarteng, the Business Secretary, and Rishi Sunak, the Chancellor, to pay for the boiler upgrade grant, it is understood.

The scheme is an expansion of an existing £4,000 state subsidy called the “clean heat grant”. A wider range of households will be eligible for the renamed, more generous “boiler upgrade grant”.

Ministers will also vow to work with industry to halve the cost of heat pumps by 2025, an aim a sceptical Whitehall source on Thursday night warned could be overly “ambitious”, although Octopus Energy has said it believes the target can be met.

At present, heat pumps far outstrip the price of gas boilers, which cost between £1,500 to £3,500.

The running costs of the two heating systems are currently similar due to the artificially high price of electricity. But over the next decade, green levies imposed on electricity bills are set to be shifted to gas bills under plans to be approved by ministers.