Fuel poverty campaigners have written to Prime Minister David Cameron demanding that party leaders act on the "national crisis" of cold homes.
The UK is second only to Estonia among European nations for the number of people who are struggling to pay their energy bills, according to research by the fuel poverty alliance Energy Bill Revolution found.
The alliance, which includes Age UK, Barnardo's, Consumer Futures and National Energy Action, has told leaders that investment in "super insulation" for the nation's homes is the only way to end the "scourge" of fuel poverty and the best way to bring down energy bills.
It said "woeful" levels of insulation have led to Britain's homes falling "way behind" those of comparable European countries such as Sweden, Germany and the Netherlands.
The alliance said the wholesale cost of gas in the UK was much lower than in most European countries but households paid much higher bills due to the amount of heat lost from homes.
There are more than five million UK households living in fuel poverty, defined as spending more than 10% of their income on energy.
The Energy Bill Revolution said it wanted to see carbon tax spent on an ambitious programme of home insulation, claiming that it could save up to £500 a year on a family energy bill and eliminate fuel poverty in the UK "once and for all".
The groups warned party leaders that focusing on "short-term solutions" to the energy bill crisis, such as price caps, windfall taxes and cutting green subsidies, they were "ignoring the only way to truly solve the energy bill crisis".
Energy Bill Revolution campaign director Ed Matthew said: "Our political leaders are falling over themselves to come up with headline-grabbing ways to cut energy bills yet they fall woefully short of a true solution to the energy bill crisis.
"By far the biggest opportunity to cut energy bills is to fully insulate the UK's leaky homes. No other investment can do so much for so many. If the Government is serious about solving this crisis they must make insulating homes the UK's number one infrastructure priority."
Barnardo's assistant director of policy and research, Neera Sharma, said: "1.6 million children now endure the misery of growing up in cold homes, which can affect every area of their wellbeing.
"It's a disgrace that not only has so little action been taken to bring down energy bills, but so little is being done to stop them continuing to rise further for the UK's poorest families.
"The Government must tackle this national crisis, making homes more energy efficient to reduce the effects of poverty. They can start by channelling funds raised by the carbon tax into making homes warmer."
Households are facing significant increases to their energy bills this winter, with consumer groups and charities warning that many will be forced to choose between "heating or eating".
Bosses of Britain's big six energy firms have been summoned to appear before a committee of MPs on the Energy and Climate Change Select Committee next Tuesday to explain a new round of price rises after SSE, British Gas, npower and Scottish Power all announced increases of more than £100 to an average dual fuel bill.
Mr Cameron surprised MPs this week when he made an apparent U-turn on costly green levies, saying he would roll back some of the measures following mounting claims by providers that they are one of the main factors forcing up prices.
Environmental charges are thought to be driving up energy bills by an average of £112 per household a year.
Age UK's charity director Caroline Abrahams said: "With fuel poverty blighting the lives of millions of households, it is nothing short of a national scandal that the UK is lagging so far behind other countries when it comes to tackling the problem.
"Cold homes can have a devastating impact on older people's health, putting tens of thousands at risk every winter. Energy efficiency is the only sustainable long term solution to rising energy costs, and decisive action is urgently needed to tackle the root cause of the problem - the UK's poorly insulated housing. As part of a clear, long term strategy, the Government must commit to using carbon tax revenues to insulate fuel poor homes against soaring energy prices once and for all."