British Gas is cutting gas and electricity prices for the second time this year after revealing that it has already won back 678,000 customers from its rivals in just two months.

Britain’s biggest energy supplier is shaving gas prices by 3 per cent and electricity by 6 per cent, with the cuts taking immediate effect.

The move will knock another £40 off the average annual dual-fuel bill for a British Gas customer, meaning prices have come down by £207 so far this year to £913.

It comes just six days after it emerged that complaints about British Gas had more than trebled in the past year after huge teething problems with a new billing system.

Phil Bentley, managing director, told Times Online: “We take the flak, we cop that, but we don’t get the plaudits we deserve for being the industry leader we are.

“We have led the market down, this is our second price cut, and some of our competitors haven’t announced any.”

He added that the ability to pass the cheaper prices on immediately was one of the advantages of the new billing system panned by Energywatch for sending out thousands of inaccurate bills.

“What we have to do now is make sure our service is top of the pile and make sure customers can stay with us,” he said.

British Gas announced the first price cut for six years in February.

The group today revealed that it has signed up 678,000 customers since the cuts were announced. It lost a million last year after record-breaking price rises and saw its share of the gas market fall below 50 per cent for the first time ever.

So far npower, Powergen and Scottish & Southern Energy have all followed with cuts of their own.

Only EDF Energy and Scottish Power, bought earlier this year by Spain’s Iberdrola, have kept their rates unchanged.

Ofgem, the energy regulator, slammed both companies two days ago in a rare public attack and urged their customers to switch to a cheaper supplier.

Alistair Buchanan, Ofgem chief executive, said: “Today’s announcement by the largest energy supplier, British Gas, of their second price cut is further proof of how competitive the energy market is.

“Customers are firmly in the driving seat and over 600,000 switched in the first two months of this year alone.”

Mark Todd, director at energyhelpline.com, said British Gas was now a "cheap energy supplier".

He said: "It is turning the tables on the likes of EDF and Scottish Power, who have still not reduced energy costs for their customers.

“Scottish Power and EDF are in danger of taking on British Gas’s mantle as the most hated energy company. Callers to our helpline are now choosing not to go with Scottish Power, even if the tariff is competitive, because of all the bad press it’s received recently.”

Times Recommends

• Equitable Life halts £7bn sale on market turmoil
• Potential buyers emerge to save Woolworths staff
• Terrorist attacks close Bombay Stock Exchange