British Gas raised charges for domestic gas and electricity by 15 per cent with immediate effect, its owner Centrica said.

British Gas has a string of gas-fired power stations and is therefore more exposed to swings in the wholesale price of gas than its rivals, many of which have hydroelectric and coal-powered stations.

It said wholesale forward gas prices had risen by 51 per cent since it cut household charges last spring, eroding its profit margins to around one per cent, and if it didn't hike prices now it would be loss-making this year. EDF Energy said it would increase its electricity prices by 7.9 per cent and gas prices by 12.9 per cent.

And earlier this month Germany's RWE announced an average 12.7 per cent hike in power and a 17.2 per cent jump in gas prices at its British unit npower.

British Gas called for the rest of Europe to follow Britain by liberalising energy markets faster to help break the historic link between gas prices and oil prices.

"The UK gas market is competitive but is now fully linked to Continental Europe where the gas market is less competitive and prices are linked to oil prices," said British Gas MD Phil Bentley.

"As oil prices have increased, so has the cost of gas across Europe, and this has hit the UK," he added.