The government has defended its decision to hand billions of pounds in financial support to struggling carbon-intensive companies in the wake of the Covid-19 crisis, amid accusations it "ignored" the ramifications of these bailouts for the UK's legally-binding net zero emissions target and Paris Agreement climate obligations.

Campaign group Plan B claims the "reckless" bailouts - which saw firms such as RyanAir, EasyJet, Rolls Royce, and Nissan secure public loans to support them as demand slumped following the introduction of lockdown conditions - did not come with explicit 'green strings' attached to incentivise corporate decarbonisation efforts, and therefore risk locking the UK into a high carbon economic recovery.

Plan B issued a legal letter to the Treasury last month setting out its argument that the government had a responsibility under the Paris Agreement and its 2050 net zero target to ensure public money was deployed with the UK's climate change obligations in mind.

The intervention followed calls from campaigners, politicians, and even former Bank of England Governor Mark Carney for governments around the world to ensure public money used to support struggling firms was mobilised in a way that helped further climate action. A number of governments imposed climate-related conditions on bailout packages, with the French government requiring airlines to commit to new emission reduction goals and the Canadian government demanding that firms that receive support enhance their climate-related financial disclosures. Meanwhile, poll last month found two-thirds of British adults favoured attaching conditions aimed at cutting carbon emissions to public bailout money.

But in its response to Plan B's letter, published today, the government rejected the campaign group's claims. It argued the bailouts were intended first and foremost as "emergency liquidity support" based on "general criteria determined so as to protect, as far as possible, eligible businesses from irretrievable financial harm as a result of the pandemic".

It also said it "does not accept" that the failure to attach climate conditions to the bailouts was incompatible with the UK's climate obligations under both the 2050 net zero target and the international Paris Agreement.

"The government has remained committed to meeting its climate change and wider environmental targets, including net zero by 2050 and putting tackling climate change at the heart of the economic recovery," states the letter, which goes on to highlight recovery measures announced in recent weeks aimed at supporting green technologies, home energy efficiency and tree planting.

The letter further states that the government plans to bring forward further plans to decarbonise sectors such as "energy, heat and buildings in the run-up to COP26 in November 2021".

An HM Treasury spokesperson added that the government's bailout support would protect jobs and support company cashflows, enabling them to support their suppliers. "Our response to the coronavirus crisis will protect jobs and ensure that our economy is match fit for the future to deliver on priorities such as achieving net zero carbon emissions," the spokesperson said.

But Plan B director Tim Crosland said he was dissatisfied with the government's response, and would now seek to file court action against the Treasury over the bailouts, which he slammed as a "fundamental breach of the social contract".

"Instead of addressing the evidence that its bailouts for polluters will lock us into a disastrous trajectory towards 4C warming, risking billions of human lives, the government is hiding behind legal arguments to claim that it isn't legally required to take that into account," he said in a statement today. "It is the basic responsibility of the government to safeguard its people… This has to be stopped. We will now begin work on filing our claim with the court."

It is not the first time the government has faced legal threats from Plan B over the UK's climate change obligations. The campaign group successfully challenged the government's approval of a third runway at Heathrow Airport on similar grounds, arguing the decision did not take into account the UK's net zero and Paris Agreement responsibilities. In a landmark ruling in February, the Court of Appeal ruled against the government, dealing a major blow to the government's airport expansion plans into turmoil.