Ed Miliband, whose brother foreign minister David Miliband who had been mooted as a possible challenger to Brown's leadership, takes on the task of getting business and households to improve energy efficiency and reduce harmful emissions.

He will also face the challenge of improving cooperation on the international stage to tackle climate change, where Britain has insisted that the developed world must take the lead.

"Bringing energy and climate together at last reflects the urgency of the threat we face from climate change," said Greenpeace executive director John Sauven.

"Miliband's new team needs to bring fresh thinking and new ideas to the challenge of climate change. Central to this must be a new, low carbon economy based on green manufacturing and green jobs."

Environmentalists have long accused the Labour government of talking big on green issues but not producing the policies to match. The creation of a specific ministry to tackle climate change signals that could be about to change, lobbyists said.

MISSING TARGETS

In July, the environment ministry admitted Britain will miss by a wide margin its own goal of cutting carbon dioxide emissions by 20 percent from 1990 levels by 2010.

Britain must also make big changes to meet European Union renewable energy targets but, in August, then business minister John Hutton warned that the battle against climate change should not take precedence over the need to guarantee energy security.

The EU has agreed to get 20 percent of its energy from renewables like solar, wind and waves by 2020. Britain, which gets less than five percent of its electricity from renewables, has been told it would need to reach 15 percent.

"The new minister has his work cut out in setting new policies to meet the demanding targets for energy being adopted Europe-wide," the Renewable Energy Association said.

Miliband, a rising star in the ruling Labour party and regarded as a strong Brown ally, will have to deal with growing pressure from trade unions and party activists for a tax on energy firms to ease the impact of soaring utility bills.

Britain's top gas and electricity providers recently hiked their prices by as much as a third, leaving many families facing much higher bills this winter at a time when inflation is already running at more than twice the official target.

However, Britain's biggest business pressure group said making the right policy decisions was more important than government department names or structures.

"Both climate change and energy security are vital national interests that need the Government's fullest attention and urgent action," said Neil Bentley, director of business environment at the Confederation of British Industry.

"Combining them may help identify both synergies and trade-offs, but we must avoid either one becoming subordinate to the other."

(Additional reporting by Frank Prenesti, Gerard Wynn and David Clarke)