The �200,000 fine comes after an investigation into why nearly 5,000 direct debit customers were stopped from switching to a new supplier because British Gas said they were in debt.

Gas and electricity suppliers are allowed in certain circumstances to stop their customers from switching to another company if they owe money.

But British Gas, the brand name for Centrica, applied this rule to its direct debit customers who were technically not in debt.

"This was a clear abuse of the special rules surrounding the position of customers in debt," Ofgem Chief Executive Callum McCarthy said in a statement.

British Gas apologised to all its customers and said it was satisfied that the problem would not happen again.

Over-estimated bills

The British Gas fine comes hot on the heels of a damning report into how utility customers are treated.

In addition, energy companies have been accused by consumer watchdog Energywatch of treating customers who query their utility bills "like criminals" and employing "bully-boy tactics."

Energywatch adds that utility companies are far too quick to disconnect customers they see as being in debt.

Energywatch said it has examples of customers being referred to debt collection agencies or disconnected when they were wrongly accused of owing money.

It had heard of energy suppliers chasing the wrong customer for payment, of people being disconnected over "grossly over-estimated" bills and of customers being hassled by debt collection firms.

Energywatch said 1,000 electricity customers were disconnected last year, up from 375 in 2001.

Gas disconnections fell from 26,000 to 21,000 over the same period.