Prime Minister Gordon Brown is concerned' at the effect of spiralling energy costs on industry and vulnerable customers, according to Downing Street.

The premier backed Chancellor Alistair Darling's move to ask for a meeting with regulators Ofgem in the wake of the price hike, in his role as guardian of the country's macro-economic stability'.

Energy suppliers Npower last week sparked anger among customers when they announced hikes of 17.2 per cent for gas and 12.7 per cent for electricity, increasing typical bills by £95 for gas and £64 for electricity and taking the average dual power bill over £1,000 a year.

The announcement, coming against the backdrop of oil trading at more than 100 US dollars a barrel, raised concerns that other power companies may follow suit, with a knock-on effect on the British economy.

Mr Brown's spokesman said: "The Government's view in general is that we do have a competitive market for energy prices in this country and that price changes are commercial decisions.

"However, ministers are concerned, the Prime Minister as well as the Chancellor, about the effects of price rises, the effects they can have on business and vulnerable customers in particular.

"In his role as guardian of macro-economic stability it's only right that the Chancellor should seek from Ofgem their assessment of recent developments."

In a letter to Ofgem chairman Sir John Mogg and chief executive Alistair Buchanan, obtained by The Times, Mr Darling asked for a meeting soon to discuss the implications of the price rises.

And he appeared to suggest he wants to explore claims from some experts that the energy companies do not need to pass on commodity price increases to consumers at once.

Mr Darling wrote: "I would be interested in receiving your assessment of gas and electricity supply and market conditions both in the UK and Europe and likely future trends.

"I would be particularly interested in your views on the relationship between wholesale price movements and feed-through to domestic retail prices and the likely availability of gas supplies from the Continent, including Norway, for the remainder of the winter and 2008.'' He added: "Increases in energy prices has reminded us of the relationship between energy prices, macro-economic stability and government's objectives around tackling fuel poverty."

Karl Brookes, spokesman for consumer watchdog Energywatch, said: "Energywatch is not convinced the market is working in the best interests of consumers and we are pleased this review is taking place.

"If you believe we are in a fully-fledged competitive market you would expect suppliers to respond in a more innovative way than instantly responding to wholesale prices by hitting the consumer in the pocket.''