Roger Schjerva, state secretary at the Norwegian ministry of finance, said that the new rules were being introduced because it was not clear that hedge funds were meeting the scheme’s strict ethical and sustainable guidelines.

He said: “We are setting new rules for the fund for our own manager to invest in hedge funds. We will be setting strong limits.”

Mr Schjerva’s remarks came in a recent lecture on sustainable finance in London at the UK Parliament.

The fund’s current guidelines do not explicitly prohibit it from investing in hedge funds, but its manager Norges Bank Investment Management has nonetheless chosen not to invest in them. Fund officials said this was primarily because of the cost structure.

The Norwegian finance ministry’s Martin Skancke, director-general of the asset management department, confirmed that the new investment guidelines would be stricter. However, he added that they were not aimed specifically at hedge funds even though the key points of the rules, which limit leverage and demand more transparency and risk management, will make hedge fund investment much more difficult.

He said: “In general, there will be stricter rules on transparency, risk management and leverage. Indirectly, such strict rules could tighten the possibility to invest in hedge funds, but there are no specific rules on hedge funds as such.”

Mr Skancke added that the government fund l did not view hedge funds as a separate asset class, but instead as an investment vehicle for investments in the underlying assets. The fund’s returns in the second quarter of 2009 were 12.7 per cent, a record high for a quarterly result.

Much of this came from the equity portfolio, which rose 19.5 per cent and now makes up more than 60 per cent of the fund’s assets.