LONDON (Reuters) — Trade unions attacked British government plans to make utilities cut their customers energy use rather than pay a windfall tax on profits, while analysts said it was a sensible long-term solution to high energy prices.

The Energy Retail Association of power suppliers, which has opposed calls for a windfall tax on utility profits, said the policy announced yesterday was a better idea than taxation.

"The investment in energy efficiency measures announced today represents a more sustainable and long term solution to our energy needs," it said.

The government package includes £910 million ($1.59 billion) of extra cash from the utilities to help householders, facing soaring bills, to make their homes more energy efficient.

Utility watchdog energywatch said it was too little too late to help customers facing much bigger energy bills this winter after two rounds of big price hikes earlier this year.

"The lack of political will to tackle fuel poverty is not just disappointing, it approaches negligence. While government has now woken up to the scale of the challenge and is becoming alert to the need for some action, the sense of urgency is lacking," Energywatch chief executive Allan Asher said.

The GMB union, which has members in every sector of the UK economy, welcomed the government's stance that it may act to reduce "unjustifiably high charges" for energy users who pay in advance — and who are often on low incomes — if the industry and its regulator failed to solve the problem.

But GMB General Secretary Paul Kenny said: "In the energy market, we have the equivalent of a house fire, but the government has yet to send the fire brigade to deal with the obscene profits."

Scottish & Southern Energy said energy suppliers were already due during 2008/9 to spend around £900 million on Carbon Emissions Reduction Target (CERT) measures.

The new requirements were expected to add around £300 million pounds a year to the total in the current year and in each of the next two years, it said.

"Today's package comes on top of the agreement reached just five months ago to offer significantly increased assistance to the fuel-poor and groups vulnerable to fuel poverty," said SSE's Energy Supply Director, Alistair Phillips-Davies.

"The scale of what the government is now expecting, and the extent of the resources required to deliver it at short notice, at a time of rising fuel input costs, are very substantial."

British Gas owner Centrica criticised the move to force energy suppliers to provide £910 million, on top of £2.8 billion committed during the next three years.

"Whilst the government is right to focus on improving the energy efficiency of Britain's homes to reduce consumption, this additional obligation will place a further burden on our already-stretched resources, at a time when we are making record investments in securing new energy sources for the UK," managing director Phil Bentley said.