A flagship council scheme to install energy efficiency measures in thousands of Birmingham homes has been scrapped amid claims the Government "has moved the goalposts".

The Birmingham Energy Savers scheme was launched in 2011 with the aim of upgrading up to 60,000 homes with more efficient heating systems and better insulation - backed by the Government's green deal policy.

It was designed to cut household fuel bills, cut greenhouse gas emissions and support the region's growing green economy by creating thousands of jobs for suppliers.

But in four years just 16 homes received the full green deal refit and another 3,000 installations were carried out using other funds and grants.

Birmingham's cabinet member for sustainability Coun Lisa Trickett said increased interest on loans for installation and cuts in subsidies meant residents using the green deal could end up paying more, rather than making the promised savings, on their energy bills after the work was done.

She said the green deal interest rate was seven per cent but many homeowners taking out loans for solar panels or a new boiler could access a personal loan at three or four per cent rates.

So the council and its contractor Carillion have agreed what Coun Trickett described as an "amicable divorce" and wound up the Birmingham Energy Savers scheme.

Coun Trickett said: "Everyone at the council and Carillion Energy Services has done their very best to make this partnership work.

"When you are asked to deliver something that is based on a flawed central government model and significant changes in the energy efficiency market, you are faced with an impossible job."

She said Carillion had agreed to carry out remaining commitments on the deal.

"With the Government constantly moving the goalposts there was absolutely no chance anyone could have hit the final target of 60,000 homes and 1,000 non-domestic buildings across the city at no net cost to the council," Coun Trickett added.

She said cutting green subsidies was a false economy as reducing fuel poverty and reducing damp in homes would have cut sickness rates, saving health services money, adding that the council would be looking at other options for encouraging fuel efficiency and tackling fuel poverty.

The Government cut its green deal funding in July, claiming it was not cost effective and did not deliver value for money.

At the time, Amber Rudd, the energy and climate secretary, said: "We are on the side of hard-working families and businesses which is why we cannot continue to fund the green deal."