Green taxes will cost households almost £150 from next year, British Gas has claimed as it blamed the Government for a huge rise in electricity bills for three million of its customers.

Britain's biggest supplier announced that from September electricity prices will increase by 12.5 per cent, adding £76 to the typical annual bill.

The company said that the cost of green subsidies levied on bills has created "significant pressures" and suggested that it had no choice but to respond by raising prices.

However the ministers last night hit back by suggesting that the price rises are unjustified as it told the regulator to do more to safeguard vulnerable customers.

Government sources highlighted the fact that British Gas is also axing a £15 dual fuel discount currently enjoyed by 3.1 million of its customers from September.