Gas and electricity companies are being ordered by the government to hand over part of their bumper profits or face a new windfall tax, according to a newspaper report on Sunday.
Chief executives of utility firms have been told that, unless they agree to subsidise a new nationwide "fuel poverty" scheme aimed at the 4.5 million poorest households, a levy will be put on their profits, the Sunday Telegraph said.
Chancellor Alistair Darling plans to unveil the fuel poverty programme in his budget on March 12, it added.
The move follows widespread protests at ballooning gas and electricity bills. Five of the six big suppliers to homes and small businesses have announced big price increases this year, blaming soaring wholesale energy costs.
The energy watchdog Ofgem launched an investigation into power and gas supply markets because of growing public concern on February 21.
Centrica, owner of leading supplier British Gas, has received much of the criticism. The company argues the market is competitive and is working as it should.
Last week, the chief executives of Scottish & Southern Energy, the second-largest provider, and Npower, the fourth-biggest, owned by RWE, were ordered to meet ministers in Downing Street, the Sunday Telegraph said.
Over the next few days, they will be followed by top executives from Centrica, Scottish Power, E.ON and EDF Energy, which owns the former London Electricity business.
