Liz Truss will give a statement to Parliament tomorrow on her plan to freeze energy bills, the new Prime Minister confirmed today.
But she refused to tax oil and gas giants to pay for it - despite warnings they could trouser £170bn excess profits.
Instead she is expected to put a rumoured cost nearing £100billion on the national debt through borrowing more money.
She said: "I believe it is the wrong thing to be putting companies off investing in the UK just as we need to be growing the economy."
The comments provoked a furious row at her first Commons showdown with Keir Starmer at Prime Minister's Questions since entering No10.
Labour's leader said the Treasury had projected energy producers could make £170bn in excess profits over next two years - and Ms Truss will “leave these vast excess profits on the table and leave working people to foot the bill for decades to come”.
Energy bills look likely to be frozen at around £2,500 a year for the typical Brit household - and capped for businesses too - under major plans to be unveiled by Liz Truss this week.
The cap will limit the price that can be charged for individual units of electricity and gas - this means a household with average energy usage will pay no more than £2,500 - but if you use more, you can still pay more.
Allies claimed this would effectively keep bills about the same as they are now - despite the current cap being £1,971 - because Ms Truss will keep a £400 discount this winter, and do away with £153 green levies on bills.
An ally of Ms Truss suggested a cap will be applied on wholesale costs, not retail ones. That will mean businesses, who aren’t covered by the price cap, will also get help with their bills.
Crucially, a government source said Liz Truss' team has now axed massively controversial plans for Brits to repay the cost out of their energy bills for 20 years.
Instead, it appeared the cost - estimated at £90billion but impossible to guess accurately - would be slapped on the national debt.
That raises questions for what will happen to squeezed public services and spending when Ms Truss is pledging to cut taxes and massively increase borrowing at the same time.
Ms Truss today confirmed: “I will be making an announcement to this House on that tomorrow and giving people certainty to make sure they are able to get through this winter.” She added it would make sure "people can afford their energy bills".
That means an announcement will likely happen in the Commons just before lunchtime.
But asked multiple times if it would be funded by a windfall tax, Ms Truss said: "No, it won't be paid for by a windfall tax. I don't believe we can tax our way to growth."
Keir Starmer fumed: "Can't she see there's nothing new about a Tory PM who, when asked who pays, answers, 'you, the working people of Britain'."
Ms Truss retorted to raucous Tory cheers: "There is nothing new about a Labour leader who wants to raise taxes."
Keir Starmer hit back: "The face at the top may change but the story remains the same."
Ms Truss told the Commons: "I will make sure that in our energy plan we will help to support businesses and people with the immediate price crisis, as well as making sure there are long-term supplies available.
"I understand that people across our country are struggling with the cost of living and they are struggling with their energy bills.
"That is why I, as Prime Minister, will take immediate action to help people with the cost of their energy bills and I will be making an announcement to this House on that tomorrow and giving people certainty to make sure that they are able to get through this winter and be able to have the energy supplies and be able to afford it."
But SNP Westminster leader Ian Blackford said her record for being straight talking was "falling apart" and demanded to know who would pay for the energy bills support.
"After nine questions she’s still not told us who will pay," he fumed.
And despite Ms Truss’ claims, Downing Street said the current windfall tax on the soaring profits of oil and gas giants will not be scrapped.
The Prime Minister's official spokesman said: "No, that approach is not being altered.
"The Prime Minister is clear that we will not be introducing any further taxes in this space, given that we want to see broader investment in domestic oil and gas production as a transition fuel during this current global crisis we face."
The new Tory leader was grilled on the lack of detail to tackle surging energy bills, the perilous state of Britain's economy, and the record NHS backlog.
Former PM Theresa May was in the audience for Liz Truss’s first PMQs - and used her question to point out the Tories have had three leaders while Labour had none.
But her most immediate predecessor Boris Johnson - who was branded "corrupt" by SNP MP Hannah Bardell before she was told to withdraw it by the Speaker - was nowhere to be seen.
Ms Truss was flanked on the front bench by Penny Mordaunt - a rival in the leadership race - and close ally and friend Therese Coffey who is now deputy PM and Health Secretary.
She said Ms Coffey would take “immediate action” to ensure people can get GP appointments, with an announcement on the NHS expected next week.
There are questions about whether the NHS will face a funding black hole after Ms Truss vowed to divert billions in funding from the health service to social care.
It comes after Ms Truss vowed to "ride out the storm" in her first speech as prime minister on Tuesday. Despite her party governing the country for the last 12 years, the newly installed PM also said she wanted to "get Britain working again" and will take action "every day".
After entering No10 last night, Ms Truss rapidly installed close allies to key positions, including her longstanding friend Therese Coffey as deputy prime minister and health secretary.
Her Greenwich neighbour and ally Kwasi Kwarteng was also appointed to the position of chancellor as she culled supporters of leadership rival Rishi Sunak from cabinet.
Downing Street hinted the fracking ban could be lifted when Liz Truss sets out Thursday’s package.
In her campaign she said “I support exploring fracking in parts of the United Kingdom where that can be done".
On Wednesday, the Prime Minister's press secretary said: "She made clear her position during the campaign but I'm not going to get into what's in this energy package."
He insisted the Conservative Party's 2019 manifesto currently stands in full, but would not say if that would end tomorrow.
He added: "I'm not going to get into what's in the energy statement tomorrow."
No10 also refused to rule out a new Queen’s Speech after the Bill of Rights was shelved and Ms Truss warned of changes to the Online Harms Bill.
This story was amended post-publication to make clearer that the £2,500 cap is for a typical household, not every household irrespective of energy usage. The then-Prime Minister Liz Truss apologised for not being 'more specific' when outlining her plans.
