BUSINESSES and elderly people's champions in Swindon say they are shocked that gas bills could rise by a quarter.

The price hike by British Gas thought to be the largest single increase ever will be announced later this month in letters to its 11m customers.

The company says there have been sharp increases in wholesale prices but declined to comment on the timing or scale of increases.

Nationally, Age Concern warned that higher bills could lead to more deaths of the elderly while gas and electricity watchdog energywatch said that if there was such an increase it would expect consumers to leave British Gas.

Jo Osorio, the director of Age Concern Swindon, was shocked at the rise. He said: "Every increase in fuel bills will have an impact on the pockets of every person of retirement age and everyone else.

"That's why it's really important that people look around for the best value available and we can give people help to find out which is cheapest.

"If people who are worried call in to our office we have the information ready to hand on how to get the cheapest fuel."

Businesses could also face difficulties. Gerry Reilly, the vice- chairman of Swindon's Federation of Small Business said: "This is quite a shock and there will be many businesses and individuals who will suffer.

"Businesses already struggle to control their cashflow and this seems like yet another tax rise.

"Sudden price hikes like this could be final straw that breaks the camel's back. That sounds harsh but when these price increases are just brought in suddenly businesses simply don't have the time to plan for them."

Other power companies would be likely to follow suit and the rises will affect gas and electricity prices equally.

A Sunday newspaper reporting the rises quoted a British Gas insider as saying: "Directors have agonised about taking the decision because they know it is going to hurt everybody. But the harsh reality is we have no choice."

A spokesman for Centrica, the parent company of British Gas, said: "Wholesale gas prices for 2006 are up about 75 per cent on 2005.

"Clearly all suppliers are buying their gas in the same market, therefore we would expect that suppliers will be increasing their tariffs substantially. But we haven't said anything about timing or scale of an increase."