The UK Government and power industry regulators were called on last night to "turn the tide of discrimination against Britain's poorest energy consumers" whose fuel bills are proportionately higher than the better-off.

Energywatch, in its final annual report, noted that despite the well-documented impact of soaring energy prices on the poorest consumers, energy companies still "extort the poor" while reserving their cheapest deals for their more affluent customers.

Those on pre-payment meters (PPMs) and those paying by standard credit routinely pay far more for the same amount of energy than can be justified by the extra costs in financing those particular payment methods, claimed the watchdog.

It said that following the recent price hikes, when two of the six main energy companies did not raise their online tariffs, the scale of the difference between prices for those who could access online tariffs and those who could not and were stuck on PPMs was "obscene and without justification".

Research by Energywatch showed that PPM customers include the jobless, single parents, the disabled and the long-term sick. Around four out of 10 people living in housing association accommodation had PPMs.

Some energy companies argue they have no choice but to charge higher pre- payment tariffs as the cost of their provision is higher than those of direct debit and quarterly payments.

However, Energywatch said that a consumer checking the cheapest online energy deals would be shocked to discover that over a year British Gas charged PPM customers £567 more than online customers, E.on £411 more, Npower £378 more, ScottishPower £172 more and SSE £167 more. EDF, meantime, had no equivalent tariff.

It pointed out how Ofgem, the industry regulator, estimated that the extra cost to energy companies of serving a PPM household was approximately £80 per year if it had a prepayment meter for both gas and electricity.

"Energy suppliers are preying on their poorest customers with discriminatory tariffs that squeeze extra revenue out of PPM users, who include many of those least able to afford to pay their energy bills and least able to switch," said Allan Asher, Energywatch's chief executive.

"While Energywatch has achieved much in our seven years of action on behalf of consumers, it is a matter of deep regret that this has become more of a problem, not less," he added.

The issue was also raised by David Hamilton, the Labour MP for Midlothian, who, in addition to calling for a windfall tax on the energy companies, also demanded action to "end the discrimination against people on meters".

This week is Energy Action Week, which aims to highlight the plight of the fuel poor, and is being run by the National Housing Federation. Its research shows that the average annual income of PPM customers is £16,000.

John Pierce from the NHF, which represents 1300 non-profit housing associations, said: "A quarter of prepayment customers are fuel poor', which means they spend over 10% of their household income on gas and electricity and this burden is only increased by the high tariffs forced on them by PPMs.

"We are not opposed to prepayment meters as housing association tenants can sometimes struggle to pay large quarterly bills and the meters give them the chance to budget carefully but it is unfair that they are over-charged when they are already struggling with a low income."

It is thought that the issue of PPM tariffs and enabling poorer customers to benefit from the cheapest rates will feature when the UK Government's energy aid plan is unveiled next week.