"Green recovery" budget may fall flat

By Peter Griffiths

LONDON (Reuters) - Prime Minister Gordon Brown's promise of a "green recovery" budget to help the ailing economy may be no more than window-dressing because finances are too stretched to fund ambitious environmental plans.

With Britain deep in recession, Brown has billed next week's budget as a chance to promote environmentally-friendly policies that will create jobs and boost struggling businesses.

Analysts say the focus next week will be on help for renewable energy such as wind power, grants to make homes more energy efficient and perhaps a scheme to encourage drivers to trade in old cars for less polluting new models.

But while such promises may impress voters, Brown has little spare cash to throw at large-scale environmental projects as the budget deficit is expected to top 10 percent of GDP this fiscal year because of the economic downturn.

"He hasn't got a lot of room for manoeuvre, it is window-dressing," said Alan Clarke, UK economist at BNP Paribas.

Other countries around the world have allocated far more of their fiscal stimulus packages to climate change investment, according to research published last month by British bank HSBC.

It estimated that Britain's share was 7 percent, compared to 12 percent in the United States, 13 percent in Germany and 34 percent in China.

Brown's Labour Party is trailing badly in the polls and desperately needs this year's budget to win it support before an election that must take place by June 2010.