The Energy Saving Trust is to apply for charitable status and operate as a social enterprise, in response to a 50 per cent cut in funding from the Department of Energy and Climate Change (DECC).

The organisation, currently a not-for-profit company limited by guarantee, will create a new charitable parent company which will oversee a wholly-owned trading subsidiary.

Chief executive Philip Sellwood said that changes to the way the Trust operates have ensured that despite the £16.5m drop in DECC funding, its revenue will still be 75 per cent of previous levels.

“With Green Deal on the horizon, the private sector will have a huge role to play, and we have modified the way we work to reflect this by providing quality assurance for goods, services and installers.”

The news comes as the Trust is commissioned by the European Regional Development Fund to deliver a three-year, £8m project to retrofit social housing in the south-west.

The Trust is now seeking further investment in the trading arm from social entrepreneurs and business leaders, and intends for its trading activities to be fully independent of government grant-funded programmes by October.

Formed in 1992, the Trust has until now largely been funded by government grants under the Environmental Protection Act.