The European Commission announced today it will investigate European energy companies for allegedly breaking competition rules and driving up gas prices for British customers.

British consumers and business could pay an extra £3 billion in energy costs next winter unless the EC tackles the "serious malfunctions" it has discovered in the European energy markets, Ofgem, the British energy watchdog, warned.

Ofgem called on firms to voluntarily publish information on the amount of gas they hold in reserve.

It said companies, including RWE, E.On and Gaz de France, should "jump before they are pushed" and address fears that Britain has been unfairly left undersupplied with gas.

A spokesman told Times Online: "We need to be able to see the whole picture. It may be that there is no spare gas, but at the moment uncertainty is adding an anxiety premium to wholesale prices."

Ofgem's call came as the European Commission said it is investigating European companies for allegedly breaking competition rules.

At issue is the amount of gas that flows from the continent to the UK through the Interconnector gas pipe. It has been alleged that the dominance of large incumbent companies and a lack of transparency could be leading to Britain being undersupplied, despite offering competitive prices.

British consumers and businesses have both seen energy costs soar this year and have been warned to expect further hikes to their bills. EDF, the French-owned energy group, announced yesterday it would charge 14.7 per cent more for gas and 4.7 per cent for electricity from March 13 – equivalent to around £80 a year extra for the average household.

British Gas, which has yet to announce any price changes, has already signalled that its gas prices could rise by as much as 25 per cent this year and blamed soaring wholesale prices.

Adam Scorer, director of campaigns at Energywatch, the Ofgem body subsiduary, said: "Average price rises are being continually pushed up and it won’t be long before we see £1,000 energy bills as the norm. We are faced with a doubling of the number of households in fuel poverty who face the daily decision to eat or heat."

Heightening concern at possible manipulation of the energy markets led the EC to launch a probe eight months ago.

Today, Neelie Kroes, the EU Competition Commissioner, said that after the findings of an initial report, she was pursuing investigations under EU anti-trust rules into "specific cases" of closing off gas and electricity supplies.

She added: "We will act decisively to remedy the serious malfunctions identified on the energy market in order to uphold the interests of European consumers and industry and to help Europe become more competitive."

The news was immediately welcomed by Ofgem, which has claimed British customers have been forced to pay for a lack of competition in the European energy market which has led to supply shortages and higher prices in the UK.

Sir John Mogg, the Ofgem chairman, who is also president of the Council of European Energy Regulators, said: "British customers paid nearly £1 billion more for their gas this winter notably because of the failure of the Belgium-UK Interconnector pipeline to import at its full rate.

"If this happens again next winter, British wholesale prices could be up to £3 billion higher.

In winter, British households account for roughly half of gas use in the UK as heating bills boost demand.

Sir John added: "Where the report has found evidence of market abuse, we welcome the Commission’s commitment to pursue such cases urgently and vigorously. This will send a clear signal to all European energy companies that such behaviour will not be tolerated."

Though Sir John admitted that it was unclear whether European companies could have exported more gas to Britain this winter he said even if companies could not have sold more gas to Britain, the lack of transparency in the continental market on pipeline deliveries on a day-by-day basis "continues to drive market sentiment and forces up British gas prices".