Radical changes to the energy market were demanded by Trade and Industry Secretary Alistair Darling yesterday in an attempt to encourage firms to slow supplies.

In a speech to mark World Environment Day, he said it was unsustainable for them to keep chasing profits by giving consumers more than they need.

He also backed the use of "smart meters" to show householders exactly how much power appliances, such as televisions left on standby, are using up.

And he called for utility bills to provide more information on how to save energy around the home in a bid to tap in to public desire to save both money and the planet.

Addressing the Fabian Society, Mr Darling said: "We need to transform the energy market. So turn conventional wisdom on its head.

"Today companies have the incentive to sell as much as they can and inefficiency unintentionally creates demand.

"So why not turn this approach around: give them incentives to reduce demand."

Suppliers were already working to improve efficiency in homes, he said, "but demand reduction, not just energy efficiency, has to be our real goal.

"We must look at how to create a shared incentive between consumers and energy suppliers to reduce energy use.

"We must look at how we can enable the creation of energy supply companies that deliver outcomes such as heat and light and earn profits either through efficient supply of energy or reducing demand.

"It can be done. But the regulatory and business mould needs to change. It will take time but we're already talking to the industry about how, not if, we can do this."

So-called smart meters were one way of harnessing new technology to help people understand where they were wasting electricity, he suggested.

Mr Darling said the public had to be persuaded that effective changes did not have to be difficult or expensive.

Extra encouragement was also needed to ensure new homes, with more than a third of the 2050 housing in the UK not yet built, were more eco-friendly.