British Gas has denied claims it paid its staff bonuses to inflate customers' bills.

A former employee told the Daily Mail the policy encouraged staff to target charities and small businesses, with workers told they could triple their salary through commission if they sold enough of the most expensive deals as possible.

The whistleblower claimed the energy giant would sign up churches and charities to the highest-priced tariffs in order to boost their own earnings.

"People were desperate to make the salaries they had been promised, so everyone inflated the prices" he told the paper.

"Scouts was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up."

A British Gas spokeswoman said: "British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers.

"We also reject any suggestion that business contracts have been negotiated inappropriately in our business division, British Gas Business .

"This is a highly regulated and competitive market, and every part of the sales negotiation process for business customers is closely monitored. The contract is always finalised with the clear and explicit agreement of the customer.

"We take very seriously any concerns raised by employees or customers, and our processes, as well as sales agents' terms, are regularly reviewed to ensure they are fair and appropriate."

Earlier this month British Gas was ordered to pay £5.6 million in compensation and fines for blocking businesses from switching suppliers and failing to tell others their contracts were ending, by energy regulator Ofgem.

Energy and Climate Change Secretary Ed Davey said: "This is a very serious and deeply disturbing allegation that comes as we are doing all we can to make the energy markets work better for all consumers - whether domestic or businesses.

"The Government fully supports Ofgem's recommendation for a full market investigation. In the meantime, we'll continue to help people pay less for the energy they use, driving the competition that has seen the number of energy suppliers triple since 2010 and people switching supplier in record numbers."

A spokesman for Ofgem said: "There are strict rules in place which require suppliers to take all reasonable steps to ensure information provided is complete and accurate, understandable and not misleading, and that sales activities are conducted in a fair, honest, transparent and professional manner.

"Where companies fail these standards Ofgem takes firm action to protect consumers; since 2010 we have imposed £30 million in fines and redress specifically for mis-selling activities.

"Ofgem is an evidenced-based regulator and we would encourage anyone with information that an energy company is not complying with Ofgem rules to provide us with this."