Launched just last year by chancellor Rishi Sunak, the Green Homes Grant aimed to install efficient heating and improve draughty homes that are responsible for around a fifth of total carbon dioxide emissions. The policy was also designed to support more “green jobs”.

Homeowners in England could claim up to £5,000 off installation fees for an electric heat pump or insulation. The figure was up to £10,000 for those from low-income households.

Early problems with the scheme saw the deadline for applications extended by a year to March 2022, only for Wednesday’s cut-off date to be reimposed.

The Federation of Master Builders (FMB) said the decision will damage the country’s progress towards net zero targets.

Chief executive Brian Berry said: “The misguided scrapping of the Green Homes Grant scheme sends entirely the wrong message to consumers and builders, and will harm the UK’s desire to be seen as a global leader in tackling climate change.

“Flaws with the scheme should have been addressed, in consultation with industry, with a commitment to training. Instead, we have another example of a stop-go green initiative that undermines, rather than creates, certainly for both the public and installers. The government needs to be more ambitious in its thinking and set out a long-term plan to upgrade our existing homes to make them greener and more energy efficient. A national retrofit strategy would address this need and allow the Government to be taken seriously as well as regain the trust of industry.”

Mr Berry added: “Small, local builders who have spent thousands of pounds becoming eligible for work under the scheme rightly feel let down and angry. Without these workers on the government’s side, we will fail to retrofit our 28 million existing homes, missing the opportunities for green growth, new jobs, and to level up.”