Cost of living: PM Liz Truss expected to announce energy price cap freeze today

The new premier is expected to tell MPs on Thursday (September 8) that domestic energy bills will be frozen at around £2,500 - at a cost of up to £150 billion.

The Times suggested the freeze could last for up to two years - until the next general election in 2024 - and would be funded by one of the biggest increases in borrowing in the UK’s modern history.

Ms Truss will reportedly also declare she is lifting the ban on fracking.

She is tipped to follow through on her leadership vow to end opposition to shale gas extraction in places where it is backed by local communities.

Meanwhile, the new PM will also confirm she is scrapping green levies on energy bills and declare her support for more North Sea drilling, The Daily Telegraph said.

Labour pointed to prior comments from then-business secretary Kwasi Kwarteng arguing that those calling for the return of onshore fracking "misunderstand the situation we find ourselves in".

In March, Mr Kwarteng - now Chancellor - wrote in The Mail on Sunday: "Even if we lifted the fracking moratorium tomorrow, it would take up to a decade to extract sufficient volumes - and it would come at a high cost for communities and our precious countryside.

"No amount of shale gas from hundreds of wells dotted across rural England would be enough to lower the European price any time soon.

"And with the best will in the world, private companies are not going to sell the shale gas they produce to UK consumers below the market price. They are not charities, after all."

Labour has also accused the PM of writing a "blank cheque" to oil and gas giants by ruling out a windfall tax to pay for the cost-of-living package, with the British people left to "foot the bill".

Ahead of Thursday's announcement, Ms Truss acknowledged families and businesses across the country are concerned about how they will "make ends meet" over the coming months.

She blamed rising global prices on Russian president Vladimir Putin's war in Ukraine and "weaponisation" of gas supply in Europe.

"This has only made clearer that we must boost our long-term energy security and supply," she said.

"We will take action immediately to help people and businesses with bills but also take decisive action to tackle the root cause of these problems, so that we are not in this position again."

Labour said the "only fair" answer to the crisis is its own proposal to freeze bills, valued by the party at £29 billion.

Shadow climate change secretary Ed Miliband argued that "core" to any solution is the question of "who pays".

"By ruling out a windfall tax, Liz Truss, in one of her first acts as Prime Minister, has written a blank cheque to the oil and gas giants making £170 billion in excess profits, and the British people will foot the bill," he said.

The Times also reported that ministers are planning a public information campaign to encourage people to reduce their energy use this winter, in case freezing prices removes the incentive to cut consumption.