Scottish and Southern Energy (SSE) has warned its 8.5m customers that they face a possible hike in gas and electricity bills.

The company, which provides power to consumers in Scotland and southern England, said that higher wholesale prices meant that it may have to pass them on to customers.

Ian Marchant, SSE's chief executive, said: "We have no plans today to increase prices, but if the wholesale environment stays as it is we cannot defy gravity."

The firm still hoped to be "the last, or one of the last" to raise prices, but the industry faced huge pressures.

"I can see oil dropping from $129 a barrel, but I can't see it reaching $90 - the level that brought around the last round of price rises," Mr Marchant said.

"We can absorb [higher costs] for so long....but the reality is the whole industry is facing significant pressure on input costs." Earlier this year, Centrica, owner of British Gas, said that it might raise domestic power prices.

SSE's warning comes despite the company announcing a 13.9pc rise in pre-tax profits to £1.23bn to the end of March. Margins are under pressure, but Mr Marchant said the company's results were boosted by signing up an extra 700,000 customers during the financial year.

Mr Marchant confirmed that SSE was not interested in bidding for nuclear power producer British Energy. But he said that SSE was still looking at getting involved in the new generation of nuclear reactors likely to be built in Britain over the next two decades.

"Our focus is and will remain nuclear new build," Mr Marchant said.. "We buy a reasonable amount" of power from British Energy under long-term contracts, he said, adding: "I would expect these contractual discussions to continue."

SSE has been mainly Britain-focused, but has begun targeting the Irish market, buying wind company Airtricity in January for over £750m as part of its renewable energy strategy.

The company said in March it wanted to double generation from renewable sources in Britain and Ireland over the next five years.

SSE raised its dividend for the year by 10pc to 60.5p a share, and said that it expected to continue a policy of dividend growth for the next decade - with a promise of at least 7pc.