DEPARTMENTAL wrangles over funding for the Energy Saving Trust's ground-breaking Powershift programme are holding back a promised future commitment of millions of pounds to the scheme - just as demand for grants rockets. The official budget for the programme ran out last month and a contingency budget has had to be created while the Treasury and the Department of Environment Transport and the Regions lock horns over who pays for the scheme in future.

The Government says the scheme is in no way under threat and funding will be agreed, but negotiations are still continuing. A spokeswoman for the Department of Environment Transport and the Regions denied the two departments had clashed over the initiative. She said: 'This is not a row. We have been discussing future funding, but that is what happens with any programme. It is part of the department's budget negotiations.'

The main sticking point is said to be the DETR's demand that its budget be raised to take into account the extra cost of running the Powershift scheme, rather than using a special grant from the Treasury. But the deadlock coincides with rocketing demand for information about the grants available from Powershift, which can cover up to 75% of the cost of converting a clean-fuelled vehicle.

A spokesman for the Energy Saving Trust reported that since last month's Budget, when Chancellor of the Exchequer Gordon Brown slashed duty on gaseous road fuels by 29%, enquiries about Powershift grants had risen 35%, although it could not give the exact number of calls. The DETR assured says discussions over funding were a normal part of Budget talks and that money would be forthcoming.