The Labour government's decision to tax 500 firms, including coal, steel and airline companies, has delighted some environmentalists.

But others have been disappointed that sectors such as aluminium and zinc refining have been given free permits covering 94.5% of average industry emissions until 2015.

The carbon tax has also proved unpopular with voters, who now expect utility price rises, and markets, which fell by 1.5% on Monday (11 July) as investors steeled themselves for losses.