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British insurers plan to invest 25 billion pounds ($41 billion) in transport and energy projects over the next five years, the finance ministry said on Wednesday, a day before it presents a half-yearly economic update.

Boosting private-sector infrastructure investment is a priority for Britain's government, as an unexpected rebound in growth so far this year has been driven mostly by consumer spending, which is unsustainable in the long run.

Many British power stations are due for replacement in the coming years, roads, railways and airports are overcrowded. Deputy finance minister Danny Alexander said the new investment was "a massive vote of confidence in the UK economy" and would help fund the 100 billion pounds of investment projects over the next seven years that he announced in June.

Critics said the Conservative-Liberal Democrat coalition had erred by slashing public investment after it took power in 2010 in order to cut the budget deficit which totalled 11 percent of gross domestic product when the coalition came to power.

"Scheme after scheme has been announced to great fanfare but then little actually delivered," said Chris Leslie, a lawmaker and finance spokesman for the opposition Labour Party.

While the government says borrowing more to fund investment would endanger market confidence in its public finances, some critics say it would be cheaper in the long-run to finance some projects through issuing more public debt.

Infrastructure projects attract insurers because they offer the prospect of an inflation-linked return, often with a government guarantee, that helps them meet life insurance and pension liabilities.

In addition, one of the six insurers involved, Legal & General, said recent changes to a European Union regulation known as Solvency II made such investment easier.

"The terms ... are now fixed so as to permit long-term infrastructure investment without excessively onerous capital requirements," said Legal & General Chief Executive Nigel Wilson.

The other five insurers who have committed to the 25 billion pounds in investment are Prudential, Aviva, Standard Life, Friends Life and Lloyds Banking Group unit Scottish Widows.

The insurers have not yet committed to specific projects, and Legal & General said it wanted to invest partly in real estate projects that are part of the government's plans.

Britain's finance ministry said it now aimed to oversee 375 billion pounds of major infrastructure investment over the next 20 years, up from 309 billion pounds last year.

Projects include the construction by Japan's Hitachi 6501.T of a new nuclear power station in north Wales - which the government said on Wednesday would receive a public guarantee to shield private-sector investors from some of the risk of the project.

The government also said it would provide a guarantee for a 1 billion pound extension of London's overcrowded underground system, as well as other rail and road projects.

It added that it intended to sell its stake in the Eurostar cross-channel rail link by 2020.