Energy suppliers may be forced to cut prices and pay compensation to millions of customers who do not settle their bills by direct debit or are unable to benefit from “dual-fuel” discounts.

The energy regulator, Ofgem, says it is considering new “licence conditions” if suppliers fail to act voluntarily to reduce costs for the 11m customers who pay by cash or cheque every quarter.

Lawyers say that European Union rules which came into effect in 2004 may allow customers to seek compensation through the courts.

Suppliers are also overcharging 4.3m customers not connected to a mains-gas supply who cannot benefit from the 10-15% discount offered to dual-fuel customers — those who take both gas and electricity from the same supplier.

“These people should not be penalised as they have no choice in the matter,” said an Ofgem spokesman.

The warning comes after the publication of a report by Ofgem into price fixing by the “big six” suppliers. It listed several failings, including not making it clear that cheap online deals are temporary rates that will eventually be increased.

British Gas, Britain’s largest supplier, increased bills for standard dual-fuel customers by about 25% from £1,055 to £1,322 in August. However, it held rates on its most competitive deal, Click Energy 5, making it some £100 cheaper than most best-buy online rates.

However, earlier this month, Click Energy 5 rates rose by 36% from £845 to around £1,150. At the same time, British Gas launched Click Energy 6, which is about £100 cheaper than the previous version.