SSE has been watching the wholesale price of gas come down

It has written to seven million people telling them their charges will be reduced in the next few months.

The impending cut has been prompted by a fall in wholesale gas prices which have been dropping since last summer.

"We do believe we are seeing a sustained fall in wholesale prices" said a spokesman.

SSE, which trades as Southern Electric, SWALEC, Scottish Hydro Electric, and Atlantic Electric & Gas, last raised its prices earlier this month.

Its electricity prices went up by 9.4% and its gas prices by 12.2%.

That was after two other increases in 2006.

If the reduction goes ahead, it will be the company's first price cut for six years.

"We are working through the details, but we are going to give the customers reassurance" said the spokesman.

Falling prices

Last year British Gas, still the largest energy supplier in the UK, said it would cut prices sometime this spring, once it was sure the fall in wholesale prices would be sustained.

Paul Green, from online switching service Energyhelpline.com, said: "I've been speaking to all the other suppliers - everyone else is waiting to see what British Gas does."

Mr Green predicts that British Gas will announce its price cuts when it publishes its interim profits on 22 February.

And that, in turn, will see a flurry of announcements from other energy suppliers in the last week of February and the first week of March.

"They won't make a firm commitment until they see the size of BG's cuts so they can still try to undercut them," he said.

On Tuesday Npower announced a price cut of 6% - but only for new customers who sign up for one of its online tariffs.