Liz Truss is said to be considering a lengthy freeze on energy bills for homes and businesses in one of her first acts as prime minister.
Reports vary that it could last anywhere between four months or until the next general election – which could still be two years away.
Allies of Ms Truss have said the move would be ‘big and bold’ and could cost as much as £90 billion.
Details could be set out as early as Thursday as the new administration seeks to reassure worried voters following a summer of political paralysis.
According to The Times, the plan would see the government subsidise the cost of gas bought by electricity generators and suppliers.
The Sun says a ‘massive taxpayer bailout’ would fund the initiative, which could see energy bills frozen at the existing level of £1,971.
Currently households across the country are facing the gloomy prospect of energy bills rising to £3,549 as of October 1. The cap will be reviewed in January with experts warning it could top £5,000 without further intervention.
Liz Truss will enter Downing Street after her triumph in the Tory leadership contest as she prepares to roll out an emergency support package to deal with the energy crisis
Energy giants are said to be in talks with the Truss team about the details of the proposal.
Following her victory over Rishi Sunak, the new party leader will fly to Balmoral on Tuesday where she will be formally invited by the Queen to form a government.
She will then return to Westminster where she is expected to address the nation for the first time as prime minister before getting down to the business of appointing her ministerial team.
A number of key allies and supporters have already been pencilled in for some of the most senior roles, including Business Secretary Kwasi Kwarteng who is widely expected to be given the crucial role of chancellor.
If confirmed he will have the task of delivering on her promised “bold” plan to deal with surging energy bills which have plunged households and businesses into crisis.
Kwasi Kwarteng is expected to be appointed chancellor
The Daily Telegraph reported that among the measures under consideration was a scheme – costing tens of billions of pounds – to freeze bills until the next general election in 2024. The Sun instead claims the freeze would be for ‘at least four months’.
Other key appointments are expected to include Attorney General Suella Braverman, who is tipped for promotion to home secretary, and Education Secretary James Cleverly, who is expected to be the new foreign secretary.
Therese Coffey, the Work and Pensions Secretary who is described as Ms Truss’s closest friend at Westminster, is thought to be in line to become health secretary while Ben Wallace is expected to remain as Defence Secretary.
Other appointments will be closely scrutinised by Tory MPs for signs that she is prepared to bring in ministers who did not necessarily support her in the leadership race.
The day will begin on Tuesday with a final valedictory speech from Downing Street by Mr Johnson before he heads to Balmoral to formally tender his resignation to the Queen ahead of Ms Truss’s arrival.
He is expected to use his address to urge Tories to rally round his successor.
