The decision increases the original budget of pounds 360m by more than 50pc. Many wind farms are planned in Scotland but the Scottish and northern English grids need to be expanded to bring the electricity further south.

The Scottish grid is owned by Scottish Power and Scottish & Southern, while National Grid Transco owns the network in England and Wales. The regulator wants the extra investment to ensure that the development of renewable generation "will not be delayed unnecessarily".

The Government has set a target of 10pc of the country's power needs coming from renewable sources by 2010, compared with the current 3pc. Most of this is expected to come from wind farms.

Ofgem chief executive Alistair Buchanan said: "We remain committed to enabling transmission companies to make the right investment to respond to the growth in renewable generation."

The decision has been brought forward from 2007, when the next price review of the transmission companies is due. Mr Buchanan added that further funding could be approved.

Separately, water and power group United Utilities yesterday announced that it had agreed to sell its green energy operational assets for pounds 63m to a company jointly owned by Novera Energy and Macquaries Bank of Australia.