British Gas saw losses of �75m in the second half of 2005

Mr Clare's move comes after 12 years at the firm, including four years as residential energy managing director.

The news comes after parent firm Centrica posted losses of �75m for the second half of 2005.

During Mr Clare's tenure, the firm embarked on significant price increases for customers.

Higher prices

Centrica's chief executive Sir Roy Gardner said Mr Clare had led the firm through "a period of unprecedented wholesale and retail price volatility".

In February British Gas raised household bills by 22%, despite seeing an 11% rise in annual profits.

Three months later Centrica revealed that British Gas had lost 350,000 customers since the start of the year.

Like other gas and electricity providers, British Gas has faced higher wholesale prices over the past year.

Wholesale gas has become more expensive due to falling production from the UK's North Sea fields.

Mr Clare, who will leave British Gas in September, will replace David Pretty who has been chief executive of Barratt Developments for four years.

Sam Laidlaw, Centrica's incoming chief executive, is set to start in his new role on 1 July.