Scottish consumers will benefit from £321m investment over the next three years to help reduce household fuel bills, it was announced yesterday.

Energy companies in Scotland have agreed to spend more on energy efficiency for homes after talks with the Scottish Government.

The main energy supply firms will invest funds from the £3.36bn created to help reach the UK-wide Carbon Emissions Reductions Target (Cert). The scheme means companies are obliged to provide households with subsidised energy-saving measures such as cavity wall and loft insulation, energy- efficient appliances and low-energy light bulbs.

The funding will be distributed annually, with £107m going towards cheaper fuel bills each year.

It comes after a report published by the National Housing Federation last week showed nearly one-quarter of the population will be in fuel poverty by next year.

The report found that, by the end of 2009, 5.7 million UK households will spend at least 10% of their annual income on energy bills, double the 2005 levels. One million people in Scotland are classed as fuel poor.

Several major energy companies have announced price hikes. Last month nPower and Scottish Power, who have 11.8 million customers between them, announced a large increase in costs, blaming rising wholesale prices.

Campaigners yesterday welcomed the announcement of further investment, but warned steps must be taken to ensure the savings are passed on to those most in need. A spokeswoman for Age Concern Scotland said: "As winter approaches, thousands of Scotland's pensioners grow more anxious and concerned about how they will meet increasing fuel costs.

"The announcement of additional funding is, therefore, welcome. But it is essential that there is a clear joint approach involving the Scottish Government and energy suppliers to target the most vulnerable pensioners."

The Scottish Government said data collected under the first phase of the Carbon Emissions Reductions Target scheme from 2002-05 showed spending in Scotland was around 22% below its proportionate share, a shortfall equal to around £18m in the current programme.

Mr Maxwell said Scotland was in line to achieve its fair share of the budget over the next three years.

Communities Minister Stuart Maxwell said: "I was encouraged by the energy companies' commitment to work with us to help reduce fuel bills, and specifically to provide a package of insulation measures to help Scotland's fuel-poor households.

"In a significant breakthrough, the energy companies also agreed to provide information on Cert activity in Scotland and ensure that Scotland secures at least a pro-rata share of the measures."

David Porter, chief executive of the Association for Electricity Producers, the leading trade association for the UK electricity market, said: "People see spending on energy-efficiency measures for customers as a positive thing. It promises lasting benefits, as the quality of our housing stock in an energy efficiency sense is not as good as it might be.

"With much more energy- efficient homes, people can end up using less electricity."