The company, which has 5.5 million UK customers, blamed soaring wholesale gas costs for its decision.

The hikes will come into force from tomorrow and follow similar moves from rivals British Gas and EDF.

Dual fuel customers who take both gas and electricity from E.ON will see their annual bills rise by 22%, or £227, to £1226. This is an average of those paying by monthly direct debit and those who pay bills quarterly.

Graham Bartlett, the managing director of E.ON's retail business, said: "I'm very aware of the effect that today's announcement will have on our customers and I recognise that this is a very tough time for everyone.

"This was not an easy decision to make and we've tried to keep these increases as low as possible while protecting as many of our customers as we can."

The move comes a day after wholesale gas prices jumped more than 14% when a leak on a North Sea pipeline prompted fears about supplies this winter.

Wholesale gas prices for the winter continued their rise today - up 5.25p to 105.75p a therm - putting pressure on energy companies to pass on rising costs to households.

Norway's oil and gas producer Statoil Hydro said it discovered the leak on a gas pipeline linking its Kvitebjoern field to an onshore processing plant. The pipeline could remain shut until next spring.

E.ON said around 1.4 million of its customers on price protection and fixed tariff products would be unaffected by the higher bills.

The firm said it was expanding its investment to protect more vulnerable customers, with those on its Age Concern Energy Services tariff having their prices capped for the next 12 months.

But households in the UK have already seen bills soar this year due to the rising cost of wholesale gas and electricity.

British Gas announced another 35% rise for gas bills last month, and 9% for electricity, with rival EDF upping bills by up to 22%.

The UK is highly exposed to supply disruptions because it lacks gas storage compared with its European neighbours.

Historically, the UK has benefited from lower gas prices during the summer due to domestic overproduction and easily available imports.

But with hydrocarbons such as gas and oil now viewed as a scarce resource, there has been more intense competition for supplies from the continent.

The rising bills have also added to the headaches of the Bank of England's efforts to control inflation, with the cost of living more than double official targets and set to top 5% in the coming months.

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