Winner of the 2010 Walkley Award for best scoop

THE Rudd government has shelved its emissions trading scheme for at least three years in a bid to defuse Tony Abbott's "great big new tax" attack in this year's election campaign.

The cabinet's strategic priorities and budget committee has removed the scheme from the four-year forward estimates, a decision that saves $2.5 billion because household and industry compensation would have exceeded the revenue generated by the scheme in its early years.

The Herald understands the government has decided not to start the scheme before 2013 at the earliest, hoping that by then it will have gained support from the Coalition and international efforts to combat climate change will have become clearer.

After the Coalition leadership coup shattered the bipartisan deal on the carbon pollution reduction scheme in December, some environment groups hoped the government would include it as a trigger in a possible double dissolution election so that later it could be passed at a joint sitting of Parliament, or that the government would try to renegotiate the bills with the Coalition or the Greens if it won a second term in a normal half Senate poll.