The rise will affect hundreds of thousands of customers

Prices will go up by 12.4% for one million residential customers, with 500,000 residential electricity customers seeing bills rise by 9.4%.

The company blamed the depletion of North Sea and Irish Sea gas reserves.

But energywatch Scotland called the move a "body blow" to consumers and the executive called for a discounted rate for Scots customers.

The increases take effect from 20 September and come at a time when wholesale prices have been rising steeply for gas and electricity, Scottish Gas said.

They should have discounted the rate for Scottish customers. This means bills will increase by over �70 a year for dual- fuel customers Scottish Executive spokeswoman

The new prices are expected to add an extra �52 a year to a typical gas bill, which is paid quarterly, and �24 a year to a typical electricity bill, paid quarterly, or �26 a year for customers who pay by a prepayment meter.

But the company insisted that allowing for inflation, gas and electricity prices were still cheaper than in 1996 when competition was introduced to the industry.

British Gas has introduced a �10m fund to protect vulnerable customers who may not be able to absorb the latest price rises.

Scottish Gas spokeswoman Clare Welsh said: "The reason why we've had to introduce this increase is because the UK energy industry has never faced higher wholesale gas prices.

'Seriously wrong'

"The era of cheap UK energy is over, North Sea gas reserves are running out and all suppliers are having to look elsewhere to meet the UK's energy needs."

Energywatch Scotland, the independent gas and electricity watchdog, said Scottish Gas had already raised prices for gas and electricity by 5.9%, making a rise of over 18% for gas this year.

Audrey Gallacher, director of energywatch Scotland, said: "When a market price rises, as Scottish Gas claims, by over 50% this year without justification, then something is seriously wrong.

Prices will also rise for electricity consumers

"One way or another consumers deserve and must have an explanation. Energywatch will be calling for an investigation into the wholesale market."

The spokeswoman for the executive said: "Scottish customers already pay more for electricity than their English counterparts so we're disappointed Scottish Gas has failed to take this into account in the price rises announced today.

"They should have discounted the rate for Scottish customers. This means bills will increase by over �70 a year for dual-fuel customers.

"We urge everyone to shop around to get the best energy deal possible."