UPDATED: 9 OCTOBER 2014 – The federal government has rejected the Warburton review of the renewable energy target.

The spokeswoman for the acting shadow minister for Environment Kate Ellis told The Fifth Estate the government had returned to bipartisanship on the RET on the understanding that it would meet Labor’s demands to reject the two major recommendations, both of which would be a devastating blow to renewable energy.

The news follows a report published by The Australian Financial Review on Wednesday that flagged the change of mind from the government, quoting unnamed sources.

Prime Minister Tony Abbott has in recent months made it clear he wanted a strongly negative outcome from the review and the cabinet move is yet another backdown by the government among a string of backdowns that shows its hardline policy on climate and social outcomes is starting to look badly out of touch.

Today’s reprieve on the RET is likely to reboot the  renewable energy industry, which has suffered massive cuts to investment and confidence after the government’s attitude raised the issue of sovereign risk for countries operating in Australia’s jurisdiction.

The AFR said:

A negotiating position approved by the federal cabinet on Tuesday bears little resemblance to the recommendations of the review conducted by businessman Dick Warburton, which would have gutted the renewable sector.

The decision enables ministers Ian Macfarlane and Greg Hunt broad scope in trying to restore bipartisan support for the RET.

Part of the deal has involved Labor agreeing to exempt the aluminium industry from the scheme.

A media statement from Labor said it welcomed the Abbott Government’s belated rejection of the damaging key recommendations of the Warburton review.

Tony Abbott’s hand-picked panel found the RET was driving investment, holding down household power prices, creating jobs in the renewable energy sector and reducing carbon pollution. Yet, still the Review Panel recommended scrapping or significantly winding back the RET.

“Tony Abbott’s interference with the RET has seen billions in international investment stalled and put thousands of jobs at risk,” acting shadow minister for climate change Kate Ellis said.

“A review of the RET was due to be conducted by the independent Climate Change Authority, not Tony Abbott’s chosen climate sceptic, Dick Warburton.

“This whole process has wreaked havoc on the renewable energy industry and the government now needs to return to the bipartisanship that saw this industry prosper.

“Don’t be fooled into thinking the Abbott Government suddenly appreciates the benefits of renewable energy though – its Treasurer, Joe Hockey, still claims wind farms are a ‘blight on the landscape’,” Ms Ellis said.

Labor has commenced discussions with the government to ensure Australia’s renewable energy remains strong. Labor will not be part of any arrangement that risks jobs and investment.