Npower announced immediate increases in its prices, with gas up by an average 26 per cent, and electricy rising by 14 per cent.

Scottish Power followed suit with rises of 34 per cent for gas and 9 per cent for electricity. Its rises will come into force from Monday and will mean the average dual fuel customer will see bills increasing by 25 per cent.

Npower, the country's fourth-biggest energy supplier with 6.6 million customers, said the price rises will take effect from today and will mean an average annual increase of £162 for gas and £60 for electricity customers.

It blamed the price rises on "massive" increases in wholesale costs, which had made current pricing levels unsustainable.

The firm claimed until today its domestic gas prices had been the same as they were 18 months ago following a price decrease in 2007 and an increase in January, but wholesale costs had doubled.

Npower managing director Giuseppe Di Vita said: "I'm sorry we've had to increase our prices, and we've made this decision extremely reluctantly, especially as household budgets are being squeezed so much at the moment.

"There is help available for people who can't afford to pay their bills and we want our customers to get in touch if they're worried."

Scottish also blamed soaring coal and gas costs for the increases.