INSULATING every home in the region to tackle rising heating bills and climate change will cost £300m, it was revealed yesterday.

North-East councils told MPs that 500,000 homes required loft insulation and 450,000 needed cavity wall insulation.

However, it was revealed that the Government has failed to provide across-the-board grants for home energy efficiency improvements, leaving it up to councils and power companies to help.

Campaigners have complained that residents face a postcode lottery, with some councils offering tax rebates for work, while others refuse.

Meanwhile, they say a typical grant towards loft insulation is as low as £2 -leaving homeowners with a bill for hundreds of pounds if they decide to act.

The £300m bill was revealed when the Association of North-East Councils (Anec) gave evidence to a Commons committee investigating the impact of climate change on local government.

Anec, which represents all 25 main councils in the region, also said it wanted greater powers to stop residents paving over front gardens, which increases the risk of flooding.

It said some North-East councils had not yet adopted a recommended "carbon management programme" to tackle global warming, but did not say which.

On home insulation, Hilary Knox, Anec's deputy director, said: "We have a lot of old housing stock -450,000 homes require cavity wall insulation and a further 500,000 require loft insulation. One of the fundamental challenges in addressing climate change is winning hearts and minds, and encouraging citizens and communities to make lifestyle changes."

The numbers living in fuel poverty -when a household spends more than a tenth of its income on fuel bills -is rising sharply.

Last week, British Gas said it was increasing bills by 15 per cent, after EDF Energy and Npower raised prices by up to 27 per cent.