Spain is cutting subsidies for clean energy production, a sector in which it has become a leader in Europe, as part of a wave of crisis spending cuts, the government said on Friday.

The government decided to "temporarily suspend economic incentives for new installations for electricity production from renewable energy sources", it said in a statement after a cabinet meeting.

"The complex economic and financial situation makes it advisable to remove temporarily the incentives for building these installations," since the system was costing too much, it said.

The subsidies have helped Spain become the biggest source of wind energy in Europe, but now it faces tough cuts as it aims to stabilise its public finances.

In March 2011 wind became Spain's biggest single source of energy, meeting 21 percent of total demand, ahead of 19 percent met by nuclear power. The statement said renewables overall provided a third of Spain's power in 2011.

The cuts will not affect Spain's contribution to reaching European renewable energy targets, the government said. The European Union wants to have 20 percent of its energy from renewable sources from 2020.