Cold winter warms British Gas profits with 98pc rise for homes

But the firm warned it could be forced to increase the cost of bills if wholesale gas prices rise, leading to calls for restraint from consumer groups who praised the firm for keeping costs down as Britain shivered through last winter.

Parent company Centrica said its residential arm posted a surplus of 585m – 98 per cent ahead of last year – as households cranked up the heating and gas usage rose 8 per cent.

The boost in profits was also helped by the addition of 223,000 new customers this year after it cut gas bills in February.

Centrica pushed up overall operating profits 65 per cent to 1.56bn. Centrica said its price cuts – plus increased energy efficiency measures – meant average bills for its 16 million customers were slightly lower last winter in spite of the fierce cold.

It said British Gas profits would be mostly booked in the first half of the year as rising wholesale gas prices squeeze margins through the rest of 2010. Pressure will build for a rise in household bills if the upward trend persists.

Chief executive Sam Laidlaw said: "This is a competitive market so we can't give any signals but our position has always been to lead the market down and try to delay any price increases as long as we can."

Mr Laidlaw also warned of pressure building on consumers from tax increases and higher public sector unemployment as the impact of Chancellor George Osborne's emergency Budget is felt next year.

"We are not out of the woods yet in terms of the recession and we are very mindful of not pushing through any price increases unless we absolutely have to."

In spite of the huge profits rise at the residential arm, the British Gas services business saw operating profits fall 3 per cent to 109m as the big chill sparked a record level of callouts.

The company's engineers were repairing up to 35,000 boilers a day during the coldest period.

Centrica is looking to lessen its dependence on volatile wholesale energy markets through moves such as its acquisition of Venture Production and a 20 per cent stake in nuclear power firm British Energy. The group's oil and gas production arm increased operating profits 45 per cent to 485m as a 41 per cent rise in gas production offset lower average prices.

Independent price comparison website energyhelpline.com hailed the firm's restraint in keeping prices down, adding "this is not the day to beat up British Gas". Director Mark Todd said: "British Gas has led the field with price cuts over the last 18 months and it would not have attracted 223,000 new customers if it was charging too much.

"The company now has the cheapest electricity and dual fuel for standard customers and its online tariff is the cheapest in the market.

"Like all energy companies, British Gas has benefited from a double whammy of the coldest winter in more than 30 years and low wholesale gas prices and we would expect to see other strong performances from other suppliers in the near future." Ann Robinson, director of consumer policy at uSwitch.com said: "This announcement is good news for consumers as it lays to rest speculation that household energy prices will be increasing soon.

"While there is a lack of transparency surrounding wholesale prices, there is no ambiguity about large profits."

Audrey Gallacher, head of energy policy at Consumer Focus, called on the firm to resist putting up bills. "We are concerned that energy firms may actually raise prices this winter.

"With only small price cuts for customers in the last two years, despite wholesale prices being half what they were at their peak and beginning to fall again, customers will rightly be outraged if this happens."