The UK is falling behind in an economic "global race" to develop clean technology and services, campaigners have warned.
Cleantech businesses are contributing billions of pounds to the UK economy but are being used as a "political football" in a battle being fought within the Conservatives, a report by think tank Green Alliance has warned.
Infighting over policy within the party is damaging investor confidence in the UK's low-carbon sector and threatens to undermine the country's competitiveness in fast-growing international "green" markets, thee report said.
As the report was published, green businesses accused the Government of showing only "muted" support for the thriving low-carbon economy, while unequivocally supporting fracking, although its benefits to the country are unproven.
Meanwhile, Germany, China, and South Korea have all gone further than the UK in targeting low-carbon priorities for development and backing them with long-term funding support, according to the authors of the report.
Green Alliance director Matthew Spencer said: "Our competitors are raising their game, and Conservative ministers will have to be less equivocal in their commitment to low carbon if they want the UK to remain a leader in global green markets."
The UK's competitors are implementing policies ranging from carbon taxes to support for large scale renewables deployment, multimillion-pound backing for innovative companies and measures to develop clean technologies.
Until now the UK has been a leader in the global green sector, which is worth £3.4tn a year, and the country's low-carbon and environmental goods and services sector had outperformed the wider economy since the global downturn.
Green businesses are major exporters, generating trade surpluses worth hundreds of millions of pounds each in areas such as wind, solar, waste and recycling and building technologies.
But contributors to the report, which include major engineering firms, energy companies and cleantech businesses, said political conflict in the UK was deterring investment.
Spencer said: "Cleantech businesses contribute billions to the UK bottom line, but they feel like they are being used as a political football in a broader battle for the soul of the Conservative Party.”
Innovation is too short term and support for the supply chain too weak, the review also warned.
Gordon MacDougall, chief operating officer for renewable energy company RES UK and Ireland, said the UK could be at the forefront of the global low-carbon transition, but only with the right domestic policy in place.
"The Prime Minister is right to say the UK is in a global economic race and for this reason the Government cannot afford to ignore the opportunity presented by our green businesses.
"In recent months the Government's support for the UK's thriving low-carbon economy has been muted while its support for fracking, the benefits of which, in the UK context, are unproven and the costs are completely unknown, has been unequivocal. This is a balance that must be redressed."
The report called for the Government to restore confidence by using the extra £3bn planned for infrastructure development in 2015/2016 to go to low-carbon projects, and to create a £100m public green venture capital fund.
It also said the Government should support development of new international green markets and trade, by campaigning for ambitious targets in the EU's 2030 package to tackle climate change.