Using plant-based materials for fuel in cars and trucks was until recently heralded as the answer to the need to reduce carbon emissions from petrol and diesel fuels.

But the alarm expressed yesterday by Professor Robert Watson, the government's highest-ranking environment scientist, that the headlong pursuit of biofuels could accelerate climate change, is the latest in a series of comments from senior figures that have shaken Whitehall.

Both Watson and the former chief scientific officer, Sir David King, have joined the chorus of those calling for a key "sustainability" clause to be introduced to ensure biofuels do not compound the problem by competing for land with staple food crops and speeding up deforestation.

Speaking on Radio 4's Today programme, Watson said: "It would obviously be insane if we had a policy to try and reduce greenhouse gas emissions through the use of biofuels that's actually leading to an increase in the greenhouse gases from biofuels."

The comments are controversial because the government has committed the UK from April 1 to ensuring that at least 2.5% of all petrol and diesel for vehicles comes from biofuels, with that figure moving up to 5% by 2010. Meanwhile, the EU is aiming for 10% of power for transport being provided by crops from 2020.

King said a distinction should be drawn between different kinds of biofuels, some of which are more carbon-friendly than others. For example, biofuels from sugar cane in Brazil have 10% of the carbon footprint of traditional fuel, while maize-based fuels in America would have 80% or 90% of the footprint. He also has worries about the displacement of food crops by biofuel crops.

"There is enough evidence now that the White House having introduced to favour biofuels in the US has created quite a massive diversion of food crop products into biofuel production and hence pushed up prices of food, particularly in developing countries," he said.

The price of food in Britain rose three times faster than the level of inflation last year and major increases in the cost of wheat and other basic commodities have been partly attributed to biofuels. Meanwhile, vital rainforest in places such as Brazil and Indonesia is being cleared more quickly than ever to make way for new plant-based fuel production.

The views from the two British scientists came as a coalition of environmental and development groups wrote a joint letter to ministers warning their biofuels policy risked doing more harm than good. In a letter to the transport secretary, Ruth Kelly, groups including Oxfam, the RSPB and Greenpeace called for her to put an end to the biofuels policy being introduced through a Renewable Transport Fuels Obligation (RTFO) until more was known about the impact of different forms of plant-based oil.

The government agreed last month that it would undertake a review of the biofuels sector to ensure "the full economic and environmental impacts of biofuels production are taken into account in the formation of UK policy beyond 2010". The study will be undertaken by the new Renewable Fuels Agency, which will report in the early summer, but Kelly made clear that, in the meantime, the RTFO would apply from the start of next month.

The review follows expressions of concern from Stavros Dimas, the EU's environment commissioner, the Royal Society and a parliamentary environmental audit committee. The last concluded that the possible risks outweighed the benefits and said both the UK and EU should scrap their targets until the green advantages of biofuels could be guaranteed.

Ministers have also been influenced by two studies highlighted recently in the US journal Science. In one, researchers calculated that converting natural ecosystems to grow corn or sugar cane to produce ethanol, or palms or soybeans for biodiesel, could release between 17 and 420 times more carbon than the annual savings from replacing fossil fuels. Stephen Polasky from the University of Minnesota, one of the authors of the report, said: "Landowners are rewarded for producing palm oil and other products but not rewarded for carbon management. This creates incentives for excessive land-clearing and can result in large increases in carbon emissions."

Any retrenchment by government over biofuels will cause resentment within big business, which was opposed to the concept but has started to invest heavily.

The value of renewable power companies has soared over recent years. BP recently announced it might sell off part of its "green" energy business, while Shell has put up for sale its Infineum joint venture with ExxonMobil, which produces biofuels. But new British businesses such as D1 Oils, which produce "second-generation" biofuels, have been laying off staff, saying the increasing opposition to these fuels is undermining the business.

Profile: Bob Watson

Professor Bob Watson came to Defra in September 2007 with a successful career in science and international policy behind him. He has held distinguished positions at the World Bank, Nasa, the White House and the Intergovernmental Panel on Climate Change (IPCC).

He has attracted both praise and criticism for his environmental convictions. He was described by vice-president Al Gore as his "hero of the planet", but when his chairmanship of the IPCC was up for renewal in 2002, it was blocked by the Bush White House.

Watson began his career as a physical chemist at Queen Mary College, London. His early scientific work was at the University of California, Berkeley, the University of Maryland and Nasa before he joined the White House office of science and technology policy in July 1993.

From 1996 until last year he held various roles at the World Bank, including chief scientist, and from 1997 to 2002 he was chairman of the IPCC.