BP has scrapped plans for a pioneering project to capture carbon in Scotland after the British Government’s energy review yesterday delayed a decision on subsidies.

Ministers said they planned to launch a competition for a funding award in November – described by the oil giant as “an extension too far” for its ambitious plans to succeed. It has already spent £25m on the project.

A spokesman for the company defended the decision, insisting that it did not mark a decision to draw back from the green initiatives that were put in place by the former chief executive Lord Browne.

There have been suggestions that his successor, Tony Hayward, is less keen than his predessor on attempts to make BP a green energy provider.

Although a spokesman denied this, the rumour on the street is that Hayward will concentrate on good old oil and gas.