All households in Britain will get an energy bills discount of up to £400 and won't have to pay it back, it has been reported.
Rishi Sunak is set to announce the grants plan - to be distributed by energy companies - on Thursday as part of a package to help with the soaring cost of living, according to sources.
It's reported Chancellor will scrap a much-criticised "rebate and clawback scheme" that would have seen people get a £200 discount on energy bills from October 1.
Suppliers would have recouped the funds by charging £40 extra a year over five years - leading to criticism it was effectively a loan.
Instead of the repayable £200, families will be given a non-repayable sum of up to £400, The Times reported.
The Chancellor is expected to unveil a "mix-and-match" package of support - some targeted and some universal - that could cost more than £10billion, funded by a windfall tax on oil and gas giants in a major U-turn.
Boris Johnson had repeatedly slammed Labour's call for a windfall tax. But annual bills are set to hit £2,800 in October and the PM is desperate to draw a line under Covid lockdown-busting parties.
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Other measures could include further cuts to council tax bills and an increase in benefits, with ITV highlighting the idea of a one-off payment to the poorest of £600.
But ministers have ruled out restoring the £20 Universal Credit uplift during Covid due to fears any increase could become permanent.
Other measures which have been discussed include increases in the winter fuel allowance.
But a reduction VAT on energy and fuel is not included in the plan, with any tax cuts delayed until the Autumn Budget, The Times reported.
Despite the additional support, most households will still face astronomical rises. Energy regulator Ofgem chief executive Jonathan Brearley warned energy bills will rocket by another £800 in October to £2,800.
On top of April's increase, average bills will have risen by 119% in a year.
IFS director Paul Johnson raised questions over the idea of a universal payment, telling BBC Radio 4's Today programme: “Whether it’s needed for all households I think is more of a difficult point.
"Each £100 costs something like £3bn, and a lot of that money, frankly, will go to households who don’t desperately need it.
"I’m sure they’ll appreciate it, but [they] won’t necessarily need it.
“So it’s the details of what’s going to go to the poorest that I think we really need to look out for.”
The Chancellor will need to be careful that any extra help he puts in to the economy does not add further to inflation, which is currently running at a 40-year high.
As well as the possible impact on inflation, the Chancellor's ability to help beyond the £22 billion package already announced will also be restricted by the state of the nation's finances.
Johnson said the hundreds of billions poured in to dealing with the Covid pandemic had left a "very difficult fiscal position".
At a Downing Street press conference he acknowledged households "are going to see pressures for a while to come" as a result of the spike in global energy prices and supply chain problems following the pandemic.
But he said: "We will continue to respond, just as we responded throughout the pandemic.
"It won't be easy, we won't be able to fix everything.
"But what I would also say is we will get through it and we will get through it well."
A spokeswoman for the Treasury declined to comment on the details, but said: “We understand that people are struggling with rising prices, which is why we’ve provided £22 billion support to date.
“The Chancellor was clear that as the situation evolves, so will our response, with the most vulnerable being his number one priority.
“He will set out more details [on Thursday].”
