Germany is expected to spend less than half the €83bn it earmarked for subsidising energy prices this year, according to a top economic think-tank, leading to a bitter battle within the country’s coalition government over how to use the extra cash.

Economy minister Robert Habeck, one of the leaders of the Green Party, is pushing to use the savings for a subsidy on industrial electricity prices. But he is facing opposition from fiscally conservative finance minister Christian Lindner, head of the liberal FDP, who would rather use the money to reduce Germany’s budget deficit.

The Munich-based Ifo Institute on Wednesday estimated the “gas price brake” that German chancellor Olaf Scholz unveiled last year, as part of a €200bn plan to cushion the impact of the country’s energy crisis on households and small businesses, would cost about €13.1bn due to lower gas prices — only a third of the €40bn set aside for it this year.