The government has cast doubt on the prospects for mandating the rollout of real-time networked energy meters to the UK domestic market.

Despite declaring the case for smart meters in small businesses to be " reasonably positive," the Department for Business, Enterprise and Regulatory Reform (BERR) said there was a "more questionable economic case for domestic rollout."

The Energy Retail Association (ERA) said this week marked "a crucial step towards the introduction of smart meters in every home in Britain," as the government responded to the consultation on its energy white paper, and the Energy Bill reaches its final stages of debate in the House of Commons.

The ERA said the BERR response echoes the industry's view that real-time networked meters, not less functional clip-on display devices, are the key to revolutionising the UK energy market.

BERR said that while it recognised the potential of electricity display devices for influencing consumer behaviour, suppliers will not be forced to provide these as standalone devices.

Instead, the government will work with suppliers to reach a voluntary agreement on the medium to short-term provision of electricity display devices.

But the industry is still adamant that a mandate for fully-functional smart meters is the only way forward.

And the industry will work with the government to ensure that it happens, said ERA chief executive Duncan Sedgwick.

"The government's backing for smart meters rather than the lesser prize of electricity display devices will be vital in keeping costs low for consumers and providing customers with what they really want – accurate billing, " he said.

"The government must now give industry a mandate and a clear timetable for the rollout of smart meters and we will work closely with them to ensure this is delivered."