Progress in cutting fuel poverty is set to be reversed and the misery could affect between one and two million households in England by 2009, energy campaign groups warn.

Rising energy prices and relatively static incomes will leave people struggling to pay fuel bills, according to energywatch, the charity National Energy Action, and the National Right to Fuel Campaign.

Government figures had shown that fuel poverty had been steadily falling from 6.5 million households in 1996 to two million in 2003. But now, the campaign groups' report warns, steep price rises in the past 18 months have already reversed the progress made.

A fuel-poor household is defined as one that would need to spend more than 10% of its income to maintain warm and healthy conditions within the home. Vulnerable households comprise those with older occupants, families with children or where a householder is disabled or suffers a long-term illness.

Paradoxically, almost at the same time last week, Powergen announced 11.9% gas and 7.2% electricity price rises as energy producers increased prices to them.

Energywatch chief executive, Allan Asher said, "The scale of these hikes are a hammer blow for people already struggling to pay their energy bills, not to mention those businesses operating on tight margins who are facing even bigger rises.

Even before the rises were announced last week, William Gillis, chief executive of National Energy Action (NEA) said: "Much of the previous good work to wipe out fuel poverty is being undone now that higher energy prices seem a permanent, rather than a temporary, condition."

"Government needs to commit significant resources to domestic energy efficiency and to address those properties that cannot be improved by traditional methods if we are to ensure all households can enjoy affordable warmth in the future."

Allan Asher said, "If the Powergen rise is indicative of what’s to come from other suppliers then the government's fuel poverty targets will not be met. All of the good work being done by government, companies and others to fight fuel poverty just cannot keep pace with price rises on this scale."

The energywatch chief said government must push the European Commission review of wholesale gas markets to deliver an open and effective energy market that does not penalise UK energy consumers.

Other measures could include greater integration of the myriad grants, schemes and other assistance that is already available for low-income consumers.