The scheme, designed to cut carbon emissions and help people save money on bills, will be available to 125,000 households with working boilers with the lowest 'G' rating in England. They can apply for vouchers from the Energy Saving Trust towards an 'A' rated boiler or renewable heating system.
More householders may be able to take advantage of the scheme if some energy companies go ahead with plans to complement or match the Government offer with money-off initiatives for upgrading to more efficient boilers. The heating industry says the average cost of a boiler and its installation is around £2,500.
The £50 million scheme will save as much carbon as taking 45,000 cars off the road and cut a household's energy bill by up to £235 a year, according to the Government, who also claim it will aid workers in the industry.
Prime Minister Gordon Brown said: 'The Government's new scrappage scheme will help to secure 250,000 jobs across the tens of thousands of small and medium businesses involved in boiler manufacture, sales and installation that form a vital component of Britain's low carbon economy.'