The tension between the Government and Britain's biggest power companies escalated last night after British Gas, the country's biggest supplier, ruled out any price cuts until the spring, despite steep recent falls in wholesale prices and demands for action “as soon as possible” from Ed Miliband, the new Energy Secretary.

Centrica, which has 16 million customers in the UK, said that it would be unable to pass on any cuts in gas or electricity prices until well into 2009 because it was locked into costly bulk gas purchase contracts that it had taken out in the summer, just before wholesale prices plunged.

“We cannot now sell this gas at a loss...we will have to wait,” a spokesman said. The defiant remark came as Britain's power companies scrambled to respond to Mr Miliband, who used a speech at Imperial College, London, on Tuesday to assail the industry for failing to reduce customer bills and employing unfair charging practices. He also wielded the threat of greater state intervention in the industry.

Mr Miliband was joined on Wednesday by a fresh chorus of attacks on the power industry. Derek Simpson, joint general secretary of Unite, Britain's biggest trade union, said: “The energy companies are full of heartless excuses on why they can't reduce our fuel bills.”

Gordon Lishman, director-general of Age Concern, said: “With around one in three pensioner households now in fuel poverty, this will be a bitter winter for many older people. Many of them will be wondering why the energy companies are still failing to pass on the benefit of reduced wholesale prices. Ministers must intervene now to deliver on their promise to end unfair energy pricing.”

However, the Energy Retail Association, which represents the big six power companies, dismissed the claims of profiteering. It said: “The gas you are using today may have been bought back in the summer, or even earlier, when wholesale gas prices were at record highs, which energy suppliers did not pass on to you. This is why there is always a time lag between when prices change on the wholesale market and when we see this on customers' bills.”

Gas prices are traditionally tied to the price of crude oil, which has tumbled from highs of $147 in July to $47 a barrel on Wednesday. UK wholesale gas and power prices have also fallen sharply over the same period, raising the pressure on power companies to reduce the prices they charge to consumers.

Ian Marchant, the chief executive of Scottish and Southern Energy, hinted last month that his company would move to cut prices early in the new year. However, Inenco, the energy consultancy, asserted on Wednesday that companies were unlikely to act before March, at the earliest. Inenco, which manages energy contracts on behalf of companies such as Marks & Spencer, JPMorgan Chase and John Lewis, said that when the reductions come, customers could see about a 15 per cent cut in electricity prices and a fall in gas prices of between 20 per cent to 25 per cent.

“It is important to recognise that the price consumers pay for energy is not just based on the price of oil,” Ian Parrett, of Inenco, said. “With concerns about the long-term security of gas and electricity supply, prices could stay up.”

Mr Miliband said: “We've recently seen big falls in wholesale gas and electricity prices, but I understand that because energy companies tend to buy in advance, they won't be passed on immediately. But they must be passed on as soon as possible.”

The minister also attacked the companies for forcing some customers to pay higher charges because they use pre-payment meters or can be served only by a single supplier. He gave warning that the Government would take action to stamp out unfair charging.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive