The UK will never meet its carbon targets unless homes are better insulated, ministers have been warned.
The Climate Change Committee (CCC) - an independent body which advises the UK government and devolved administrations - says the struggling Green Homes Grant must be rescued.
The scheme offers households up to £10,000 to insulate their property.
But many have not been able to apply because contractors were overwhelmed - and some contractors have not been paid for work done.
The Times has reported that the scheme might be axed in next week's Budget.
But CCC chief executive Chris Stark said he believed no decision to scrap it had yet been taken.
However, it is clear the chancellor wants to claw back cash from an original £1.5bn budget, of which just £109m has been spent on the scheme, which currently has one more month to go.
The government says Rishi Sunak will divert the under-spend into Treasury coffers, rather than keeping it for insulation.
The CCC is urging him to ring-fence the money and invest it temporarily on other insulation projects, deemed to be doing well.
Mr Stark said: "There's no escaping the fact that the UK won't hit its legally binding climate change targets unless buildings are much better insulated and low-carbon heat systems are installed."
He added that "an attractive and efficient programme for insulating homes and promoting low-carbon heating" was needed.
'£3bn more needed'
The CCC says the government needs to spend at least £2bn a year through to 2030 for badly insulated homes, with extra cash for developing low-carbon heating.
The total allocated budget for home decarbonisation is around £3bn a year currently, but the CCC estimates a further £3bn a year is required.
So what is gone wrong with the grant scheme?
The Department for Business, Energy and Industrial Strategy blames the coronavirus pandemic, which it says has made many reluctant to welcome tradespeople into their homes.
Critics say that is wrong - and that many insulation contractors have gone out of business following stop-start government incentive schemes.
Questions are also being asked about ICF, the US-based consultancy that won the contract to administer the scheme.
I understand the government is bound by a contract to continue with the company.
But a group of trades unions has written to the chancellor complaining of what it calls damage from outsourcing.
Its letter says: "The obvious answer to administrative problems is to strengthen the Green Homes Grants scheme by bringing it under public sector management and using the experience and knowledge of local authorities.
"Instead, the rug is apparently to be pulled from under the scheme. This backtracking would call into question whether this government has any real commitment to a green recovery."
Government sources say the Treasury imposed strict conditions on administrators because it was stung by malpractice in the Northern Ireland "cash-for-ash" scandal.
A government spokeswoman said around 76,000 grant applications had been made, and more than 26,000 vouchers had been issued.
Critics say this does not include the thousands of people who could not find a contractor.
The government spokeswoman said there were 938 registered installer companies registered.
But, out of 7,400 members of the Master Builders' Federation, only three had been accredited.