She said that while biofuels had the potential to cut carbon emissions there were "increasing questions" about them.

The uncontrolled expansion of biofuels might actually contribute to higher food prices and see the destruction of rainforests, she said.

Ms Kelly said she agreed with the conclusions of the Gallagher report to "amend not abandon" biofuel policies.

Her statement came on the day the World Bank president, Robert Zoellick, called for reform of biofuel policies in rich countries, urging them to grow more food instead.

A panel of government experts, chaired by Professor Ed Gallagher, head of the Renewable Fuels Agency, looked at the impact of biofuels on land use.

Poverty fears

The report did not go as far as a damning study from the World Bank last week, which blamed biofuels for a 75% rise in food prices.

But it called for biofuels to be introduced more slowly than planned until controls are in place to prevent higher food prices and land being switched from forests or agriculture to growing fuels.

The replacement of traditional fuels with biofuels has dragged more than 30 million people worldwide into poverty, an aid agency report says.

Oxfam says so-called green policies in developed countries are contributing to the world's soaring food prices, which hit the poor hardest.

The group also says biofuels will do nothing to combat climate change.

Its report urges the EU to scrap a target of making 10% of all transport run on renewable resources by 2020.

Oxfam estimates the EU's target could multiply carbon emissions 70-fold by 2020 by changing the use of land.

The report's author, Oxfam's biofuel policy adviser Rob Bailey, criticised rich countries for using subsidies and tax breaks to encourage the use of food crops for alternative sources of energy like ethanol.

"If the fuel value for a crop exceeds its food value, then it will be used for fuel instead," he said.

"Rich countries... are making climate change worse, not better, they are stealing crops and land away from food production, and they are destroying millions of livelihoods in the process."