David Cameron has ruled out appointing climate change expert David Kennedy to lead the Department of Energy in what has been described as a sign of tensions between coalition partners and between ministers and Whitehall over energy policy.

Kennedy, an economist who runs the Committee on Climate Change, a statutory body that counsels the government on climate change policies, was backed by Liberal Democrat energy secretary Ed Davey.

Following the abrupt resignation in July of Moira Wallace, the energy department is being run by Phil Wynn Owen and the name of Kennedy was signalled as the most qualified to replace him.

Details of his appointment was sent to Cameron early in November for a formal approval. In a surprise move, however, the PM said he would not support the appointment.

A spokesman for Davey told FT: "The selection process for a new permanent secretary at the Department of Energy and Climate Change has concluded without making an appointment. [They] will be re-running the competition as soon as possible."

Previously at the World Bank, where he worked on energy strategy, Kennedy was defined by an unnamed official as "the strongest candidate in the field for many years for a permanent secretary position".

Downing Street's move has prompted suspicions that Cameron is trying to woo Tory climate change sceptics who criticise Davey's support for green energy programmes such as onshore windfarms.