Home Secretary Priti Patel announced the change, which will take effect from next week, at a press conference from Downing Street this evening.
She said: “Next week we will be introducing a new £800 fine for those attending house parties, which will double for each repeat offence to a maximum level of £6,400.
“These fines will apply to those who attend illegal gatherings of more than 15 people in homes.
“The science is clear: such irresponsible behaviour poses a significant threat to public health. Not only to those in attendance but to our wonderful police officers who attend these events to shut them down.”
National Police Chiefs' Council chairman Martin Hewitt, said house parties were "dangerous and irresponsible”, citing examples where up to 150 people had attended a party with music equipment.
He said the UK is still at the most dangerous stage of the pandemic, as the death figures remain “shocking” and he said officers will not waste their time trying to reason with those breaking the rules.
And he added: “I hope that the likelihood of an increased fine acts as a disincentive for those people who are thinking of attending or organising such events.”
He said: “When we see people that are putting themselves and others in danger, we will not waste time trying to reason with them.
“They are demonstrating no regard for the safety of others, or even for themselves.”
Mr Hewitt said official figures will be released next week showing how many fines have been given out since the start of this latest national lockdown.
He said: “Forces are telling us there has been a significant increase, and that’s reflecting the fact that we’ve had more officers out on dedicated patrols taking targeted action against those small few who are letting everybody down.”
He said since regulations were introduced in late August, and up to January 17, there have been 250 fixed penalty notices issued by forces in England to people who have organised a large gathering.
Ms PAtel said: "These egregious breaches are costing lives."
It came as Dr Vin Diwakar, NHS England regional medical director for London, warned the situation in the health service was “really precarious”.
“In London, more than half of all patients in hospital are being treated for coronavirus and sadly over 1,000 patients died in hospital in London just last week, every single one a tragedy,” he said.
“Nationally, there are 34,000 people in hospital and pressure remains intense on our staff.
“We do have hope now with an increasing amount of people vaccinated but we must remain vigilant.”
And Dr Diwakar said it was “morally reprehensible” for people to try and “jump the queue” for a vaccine, after reports links shared via social media had been used by people who had not yet been invited for a vaccine.
He said: “People are being called in priority order so that we can vaccinate those most at risk of serious illness first.
“That is why I was horrified to hear reports that some unscrupulous people have used links shared with them to try and falsely book a vaccination appointment.
“To seek to do this is denying some of the most vulnerable people in our community a life-saving vaccine.
“Let me be really clear about this: it is morally reprehensible to try and jump the queue and anyone who books to get the vaccine fraudulently will be turned away.”