British Gas to cut cost of fuel bills ... but not until after the winter

British Gas today finally bowed to mounting pressure and agreed to cut its energy prices - but not until the spring.

The energy giant acted after losing almost one million customers in a revolt sparked by soaring prices.

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It had faced massive criticism over its refusal to reduce bills as wholesale gas and electricity prices fell, leading to 'rip-off' accusations by consumer groups.

Sam Laidlaw, the new chief executive of parent company Centrica, said British Gas is in a position to start cutting bills because of the recent record mild autumn as well as the new stocks of gas flowing into the UK via new pipelines from Norway and Holland.

"We will cut customer prices in the spring with the exact amount to be decided once we have complete clarity of winter gas costs," said Mr Laidlaw.

Industry insiders believe the British Gas price cut will be significant. Centrica has just over 16 million customers taking gas and electricity from British Gas.

It hiked household bills by 22 per cent in March and put a further 12.4 per cent on the cost of gas and 9.4 per cent on the cost of electricity in September.

British Gas is the most expensive energy supplier in the UK with average annual gas bills up 91 per cent since 2003 to £707 and the average electricity bill 81 per cent higher at £428.

A cut of £100 a year or nearly nine per cent would put British Gas on a par with its main rivals Powergen and npower, taking British Gas's gas and electricity customers dual fuel bills to about £1,035.

Though British Gas has been losing customers at a rate of nearly 20,000 a week, Centrica's group profits are still likely to hit £1.6 billion for the year.

Centrica has also announced 1,300 job losses, mainly in administrative roles, but many of those employees will be redeployed to British Gas.