The British government's waffling on alternative energy is to blame for the reported demise of a major carbon capture project, a Scottish Cabinet member says.

Scottish Energy Minister Fergus Ewing responded Monday to a report that a flagship effort to capture and sequester carbon dioxide from a coal fired power plant at Longannet, Scotland, has been scuttled by pointing a finger at British Prime Minister David Cameron's government.

"While Longannet is ready to be one of the world's leading (carbon capture and storage) whole-chain demonstrator project, the Treasury and (the Department of Energy and Climate Change) appear to disagree over the necessary funding -- despite the whole project set to cost less than 1-10th of this year's estimated North Sea oil and gas revenues," Ewing said in a statement.

The British newspaper The Guardian reported last week the Longannet carbon capture and storage project is facing the funding ax due to waning enthusiasm for alternative energy projects by Cameron's government.

The newspaper said Scottish Power, which has worked with Shell and the National Grid on the project, has "pulled the plug" on it after carrying out a detailed study concluding it will need more than the $1.6 billion that has been promised by the Department of Energy and Climate Change.

While the private and public sides of the project insisted "talks are ongoing," The Guardian cited "well-placed industry and political sources" as saying the Longannet project is "pretty much over."

The apparent decision comes as Cameron has cited the need for austerity, sparking concerns London intends to cut funding for CCS and offshore wind power.

"The CCS project at Longannet is of huge significance, not just to Scotland but to the rest of the U.K. and Europe, and I am alarmed by recent reports that the project is at risk," Ewing said. "The (Scottish) First Minister (Alex Salmond) spoke to (British) Energy Secretary Chris Huhne last week to raise his concerns and to press for a speedy resolution to this important issue."

Ewing blamed the situation on "the uncertainty around the U.K. government's proposed reforms to the electricity market," which he contended has produced "doubt in the minds of investors of billions of pounds in new energy technologies."

The proposed reforms envision providing a fixed, above-market price for electricity generated from both nuclear power and wind farms.

The reforms "are seen by many as a means of supporting new nuclear power stations south of the border -- the technology of the last century," the Scottish minister said.

Energy industry backers of CCS projects want to more broadly deploy the technology, in which the carbon dioxide gas is separated from the waste stream of burning fossil fuels at the bottom of the smokestack.

It is liquefied and piped to an underground storage site, in this case beneath the North Sea.

They see CCS systems as way to extend the lives of fossil fuel-burning plants while moving to develop greener alternative energy forms, such as hydro, wind and tidal.

Ewing said despite the Guardian's report, "no final decisions have been taken" on the Longannet effort, and he urged the British government to "do all it can to save this project" in the meantime.