Chief secretary to the Treasury Danny Alexander said the government was considering offering a fuel discount to people in remote areas.

Mr Alexander, Lib Dem MP for Inverness, told the BBC's Politics Show: "We recognise that this for many families is a serious issue."

But he said a 'fair fuel stabiliser' - lowering duty when pump prices rose - was tricky to implement.

Shadow Transport Secretary Maria Eagle said government policy was "in chaos".

David Cameron has indicated that the fuel duty stabiliser idea was being examined.

The concept of the fuel stabiliser is to peg fuel duty to the price of oil so that when the price of oil goes up the proportion of tax goes down, and vice versa, maintaining a steady price for consumers.

"It's a complicated idea and it's difficult to see precisely how we achieve it, but it's something that we are looking at very carefully to see if we can reduce the burden of fuel duty," Mr Alexander said.

Mr Alexander said the coalition government were also considering the discount scheme to help drivers in remote areas such as the Scottish Highlands, Western Isles, west Wales and parts of England and Northern Ireland.