The Centre for Economics and Business Research study reveals that 16,723 new jobs would be created within the forestry industry and another 42,000 in downstream industries as bio-energy demand increases.

The figures were released as trade and industry secretary Alistair Darling outlined the government’s Energy Review.

Mr Darling said Britain faced two major challenges – climate change and the need to provide secure cleaner energy at affordable prices – and he reiterated the government’s commitment to renewable sources of energy including biomass.

“The renewed commitment to supporting the establishment of a biomass industry is welcome,” said David Crichton, chief executive of ConFor.

“However, the reality is that it is seen as the poor relation compared with wind and wave generated energy,” he added. “Our report provides a major incentive for the government to put its weight behind the development of a truly sustainable source of energy.”