Energy giant British Gas is siphoning off millions of pounds of extra profits annually by keeping hold of money owed to former customers who have built up credit on their accounts.

A whistleblower has told the Observer that £20m-worth of "credit balances" was put into the annual accounts of British Gas in one recent financial year. The shadow energy secretary, Caroline Flint, said she was "shocked" by revelations about the credit windfall, which she said was "unacceptable".

The revelations, at a time of growing public dismay over soaring bills and high profits enjoyed by the big six suppliers, will raise the political temperature further before power bosses are questioned by a parliamentary select committee on Tuesday about recent price rises.

On Friday Scottish Power became the fourth energy supplier to announce big price rises. The energy giant said it would increase gas prices by 8.5% and electricity prices by 9% from 6 December. Scottish Power acted after npower said it would raise prices by 10.4%, SSE said it would put them up by 8.2% and British Gas announced a rise of 9.2%.

Under the current system, energy companies estimate customers' future usage and charge accordingly. If less energy is used, credit is built up which can be reclaimed or used to offset higher-than-expected subsequent bills.

The profits from "credit" were taken by British Gas in cases where private or business customers had been overcharged on the basis of estimated bills, and then changed to another supplier, or ceased using British Gas for other reasons, with the outstanding sum owed to them still on their accounts.

British Gas – which argues that it is unable to track down all customers who have left them, changed addresses, or gone bankrupt – used to wait six years before taking the cash. But the whistleblower claims a special team was set up – partly based at a Leicester call centre – to fast forward this process so that investigations to locate people would be launched, and the money then taken into company accounts over a much shorter timescale.

Under this new arrangement, British Gas then took years of accumulated credit owed on accounts to augment its income. While there is nothing illegal about this, the source said British Gas was apparently nervous about how the move would be viewed if it became public. "We were briefed about how sensitive this was and there was endless talk about how this would look if it ended up on the front page of a newspaper," said the whistleblower. He believes that all the other power companies also take this kind of money back into their accounts as profit but only after six years.

British Gas confirmed that it had set up a team to improve its credit balances but declined to say exactly what contribution it made to the business. A spokeswoman said customers in credit could always ask for the money to be refunded. She added: "We did improve our revenue and billing processes and this was fully audited and highlighted in our annual report in 2011."

Flint said: "I am really shocked by these allegations. These companies say they want to rebuild customers' trust, but with practices like this it's no surprise people are mistrusting of the energy industry. It is simply not acceptable for suppliers to overcharge people on top of the extortionate bills they are already paying. When customers are in credit, this should be repaid. If companies can't find customers to repay them, they should use this money to keep bills down or help other vulnerable customers, not boost their profits."

The Department of Energy and Climate Change said confusion over energy sector accounting practices would be reviewed under plans to increase transparency which will be set out this week. A spokesman said: "Energy companies don't seem to have got the message that their customers just won't accept opaque book-keeping and unexplained profits."

Writing on theguardian.com, Dr Phillip Lee, a Tory member of the energy select committee, says the energy market is "broken" and calls for an investigation by the Competition Commission. He also says ministers need to look again at current decarbonisation targets and consider a completely new "co-operative" model for the industry.

Separately Tim Yeo, the chair of the committee, who has stood aside pending the outcome of an investigation into claims by the Sunday Times that he "coached" a witness, which he strongly denies, is writing to the prime minister with a plan to lower prices and help those on the lowest incomes.

Yeo suggests abolishing the floor price for carbon, introducing a new tariff system under which people would be guaranteed a certain amount of energy at a lower price, and then have to pay more when they pass the limit, and opening up the National Grid to competition.