UK government departments cannot agree on setting greenhouse gas limits for business, source BBC.
Ministers have pledged to reduce UK carbon dioxide emissions, blamed for global warming, by 20% by 2010.
The Department for Environment, Food and Rural Affairs wants companies to cut emissions by eight million tonnes, BBC Radio 4's Today programme reported. But the Department for Trade and Industry wants a three-million-tonne cut, to protect firms' competitiveness.
The government has settled on a compromise. Shortly, it will publish a range of cuts for big business within its climate change strategy review.
Recent calculations suggest that on the current trend, the government will achieve no more than a 10% cut.
The row matters enormously because although the UK produces only 2% of the world's CO2, it has a disproportionate profile in the global climate debate.
Other nations are looking to see if the prime minister can shift the UK's economy to the 20% cut without harming business. If he succeeds, others will follow.
Competitiveness is the key. The Chancellor Gordon Brown has asked a leading economist, Nick Stern, to investigate if CO2 cuts will damage an economy or stimulate it.
His verdict, due in the autumn, will help shape the course of policy in the UK and perhaps worldwide.
It is already clear he is not convinced by the case that by leading the way on CO2 cuts the UK risks damaging the overall economy.