The government yesterday published its response to last year's energy billing and metering consultation, confirming plans to install smart meters for all medium and large businesses but again delaying a decision on whether or not to mandate the roll out of smart meters for households and smaller firms.

Advocates of smart grid technologies reacted angrily to the decision, branding it a "shambles" and accusing the government of "dithering" at a time when other European countries have already begun nationwide roll out programmes.

"The whole industry is in favour of mandating the roll out of smart meters on the grounds that they are good for consumers, good for energy companies and good for the planet," said Joel Hagan, chief executive of smart meter provider Onzo. "Yet the government is again saying that it still needs to prove the case."

He added that some smart meter manufacturers could now be at risk of bankruptcy as a result of the government's failure to make a decision. " Uncertainty on this issue is killing progress in the industry because no one knows which way the government will go," he said. "I'm not sure some of the smaller companies making display units will be able to survive this period."

A spokeswoman for the department for Business, Enterprise and Regulatory Reform (BERR) insisted that the government remained committed to driving adoption of smart meters, but argued that a further round of consultation was required to work out the best way to manage a nationwide roll out.

"We've undertaken an impact assessment and found that a full roll out would be costly to consumers," she said. "For example, if we get the figures out by just £2 per meter and you are rolling out to 25m homes, that's an extra £50m. Everyone wants smart meters because in the long run they save consumers money, but we need to be clear about the cost and the best way to roll out the technology."

She said that the government was aiming to make a final decision on the roll out before the end of the year, adding that an amendment to the energy bill would allow it to proceed with the plans as soon as that decision is made.

However, Hagan insisted that there was already a compelling case for a full roll out of smart meters, noting that countries such as Sweden and Italy already have installation programmes underway. "Studies have shown display meters help cut energy use by between 15 and 25 per cent and once you are using full blown smart meters that allow you to introduce more flexible tariffs and even turn off appliances at peak times you can get more impressive savings still," he said.

As part of the response the government said it will also require historical consumption data to be provided on all domestic customers’ electricity and gas bills and statements, and request electricity suppliers to provide on a voluntary basis real-time display devices.