A committee of MPs has said British gas prices are "virtually at the whim" of European monopoly suppliers.

The Commons' trade and industry committee said European firms may be manipulating the market by holding back gas supplies to see if prices will rise.

The report said the rising price of wholesale gas has been mainly down to the fact that Britain is no longer self-sufficient.

Intermittent supplies come in from Europe through an interconnection facility.

And part of the problem is that the interconnector was designed on the assumption that Britain would export more gas than it would ever import.

But committee chairman Martin O'Neill said there was also an important issue of European providers not being regulated.

"Particularly in Germany and France, you have monopoly owners of the pipeline who are not subject to the kind of regulation that Transco is in the UK, and this means that prices and supplies are virtually at the whim of these unregulated monopolists within the European pipeline system," he said.

And O'Neill told BBC Radio Four's Today programme: "In one or two instances major British importers of gas found it rather difficult to get more than about two prices for long contracts which they wanted to strike last September.

"That suggests that there may have been some of the players who were frankly holding back supplies in order to see if the market would rise."

He went on to say there was no firm evidence of a lack of supply.

But he added: "There certainly is evidence that one or two players were not able to get the range of prices that you would have thought possible given the number of suppliers in the market."

Liberalisation

Liberalisation of EU energy markets is a key plank of the flagging Lisbon agenda aimed at boosting the competitiveness of the continent's economy.

However, two years after plans to open up the gas and electricity sectors were first agreed, progress has been painfully slow.

A monitoring report published earlier this year by the European Commission said there had been a "failure to fully integrate national energy supply into a wider European market".

"Secondly, member states are still failing to deal with the issue of market structure," it added.

"As has been highlighted in previous reports, the gas and electricity markets in too many member states are dominated by one or two companies, and there is often inadequate capacity for cross-border competition.

"It is imperative that solutions are found to such problems."

The Commission also said there were problems in establishing independent transmission systems for energy supplies.