Prime Minister Malcolm Turnbull has approved a radical redesign of his flagship energy policy to put a priority on price cuts rather than climate change targets in a bid to prevent a backbench revolt that could threaten his leadership.

The drastic changes will make consumer prices a key factor in deciding the scale of future cuts to greenhouse gas emissions, removing one of the biggest obstacles to a Coalition consensus on the National Energy Guarantee.

The controversial target at the heart of the policy, a 26 per cent cut to emissions by 2030, will be set by ministerial regulation rather than being cemented in legislation to avoid forcing Liberals and Nationals MPs to vote for a climate change target they cannot support.

The new approach also meets demands from Labor governments in Victoria and the ACT to allow the target to be changed by regulation, improving the odds of a deal with the states and territories to approve the NEG by October.

The revised approach will make affordability an essential consideration in any change to the target, with an expert panel or other measures being considered to put a check on a future government’s ability to raise the target with the ministerial stroke of a pen.