The coalition government will announce on Thursday plans to close Sustainable Development Commission in order to meet targets for public sector spending cuts. Proponents of the Sustainable Development Commission (SDC) argue that its remit to advise the government on reducing its carbon emissions and other resources saves far more money that it costs.

The plan to close the Sustainable Development Commission is scheduled to be unveiled on Thursday, the same day that the agency will release its annual report into green improvements to the government's operations. The list includes tens of millions of pounds worth of savings from fuel costs, water, waste and other things. Many of the changes were prompted by advice from the SDC, which has around 60 staff and a budget of just under £3m.

The closure of the Sustainable Development Commission will be seen by many environmentalists as directly counter to David Cameron's pledge to lead the "greenest government ever"

Caroline Lucas MP, the head of the Green party, called the close of the Sustainable Development Commission an "absolute disaster." She praised the SDC for playing an important part in the assembly's plans to move Wales to a zero-carbon economy, and said she had tabled a parliamentary question asking the government to assess the SDC's value to date.

The decision to close the Sustainable Development Commission, which is jointly run by the UK government and the devolved administrations, is likely to raise tensions between the Welsh assembly and Whitehall after the assembly's business minister Jane Hutt said she was concerned about the government's review of arms-length bodies and would make representations to the UK government.

Plaid Cymru's sustainability spokesperson Leanne Wood AM said "The Sustainable Development Commission was set up to advise government how to cut carbon emissions. To close the Sustainable Development Commission now would suggest that the Conservatives are lukewarm when it comes to tackle climate change."

The Department for Environment, Food and Rural Affairs (Defra) refused to confirm or deny whether the Sustainable Development Commission would be close. But a spokesperson said that in line with the coalition government's commitments, Defra was examining its large network of arms-length bodies, and no final decision had been made on other arms-length

The SDC was set up by former deputy Prime Minister John Prescott in June 2000 as a tiny £350,000-a-year operation with a unique license to be a "critical friend" to the government, moving ministers and civil servants into greener actions. SDC's first chair was the environmentalist Jonathon Porritt, the former director of Friends of the Earth.

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