According to a draft of the Co-operative Bank's annual Ethical Consumerism study seen by the Guardian newspaper, the average UK household now spends an average of £251 a year on environmentally friendly offerings.

The report, which is due to be published in full later this month, found that spending rose on a wide range of green products and services from energy-efficient appliances, light bulbs and boilers to small-scale renewable energy projects and green energy tariffs.

However, it noted that while the market has defied expectations and continued to grow steadily in recent years, the sector still accounts for less than one per cent of total consumer expenditure.

Tim Franklin, chief operating officer at the Co-operative Bank, told the Guardian that if the UK is to meet its target to cut emissions by about 30 per cent by 2020, a step change in the rate of adoption of low-carbon technologies will be required.

He added that while business innovation and efforts to promote ethical purchasing were proving effective, thoughtful government intervention, such as the decision to phase out inefficient light bulbs, was required to accelerate demand for green products.

Franklin recommended that similar initiatives should be rolled out in areas ranging from transport to electronic goods