Energy regulator Ofgem believes that over six million people who use pre-payment meters are being overcharged by an average of £320 a year. They also say that around 4.3 million customers not connected to gas supplies are forced into paying a £55 premium for their electricity.

The watchdog’s findings come after an eight-month investigation in to the energy market. Ofgem said that companies must address the problem as soon as possible.

A study last month by the National Housing Federation found that British Gas charges pre-payment customers as much as £567 more than its online direct debit customers.

Ofgem’s chief executive, Alistair Buchanan, said the findings were “not acceptable” and assured homeowners that they were “demanding change”.

“Initial findings from our energy market probe give us grounds to demand that companies end practices that hinder customers, especially the vulnerable, from getting the best deal,” he said.

Mr Buchanan promised that the watchdog was “putting on the regulatory hobnails” and warned that “if the companies don’t sort it out, we will”.

“If they fail to satisfy our requirements voluntarily then we can move to a Competition Commission reference,” he said.

The National Housing Federation study estimated that the “pre-payment penalty” adds up to more than £1.35 billion each year for the power companies.

Despite promises to take action, made by Gordon Brown and Alistair Darling, energy companies are still over-charging a penalty of £113 million every month, claims David Orr, the Federation’s chief executive, who described the practice as “outrageous”.

Mr Orr said, “The fact that prepayment meter customers are facing yet another winter of having to pay through the nose for their energy is unacceptable and ministers must now show some backbone and stand up to the energy fat cats,” Mr Orr demanded that the companies equalise the charges immediately.

The watchdog was particularly concerned about the companies’ failure to offer competition to the 4.3 million customers with no access to the gas mains, as many of them live in rural areas. Ofgem said that these customers were disadvantaged as they have very few options, which forces them to stick with more expensive electricity deals.

The watchdog said that “electricity only” customers “are far more likely than others to be fuel poor”, meaning 10 percent of their income goes on fuel bills. Under half of these customers (44 percent) have ever switched power suppliers, compared to 57 percent of consumers who have access to both fuels, it found.

Ofgem found no evidence that energy firms had been working together as a cartel to set prices. Its inquiry was launched in February after all the leading suppliers raised their prices at roughly the same time.

Mr Buchanan believes competition is healthy, and said the energy companies need to show customers the benefits of competition.

“We have to make sure the companies don’t get sloppy,” he said. “At times we have to give competition a nudge along the way, and that’s what we’re doing.”

The regulator also made a promise to be tougher on firms who exploit consumers through doorstep selling. It will now consult with the industry on its initial findings until December.