THE biggest power supplier in the UK today announced a sharp fall in profits at British Gas as it began the sell-off of its telecoms arm.

Centrica said profits from supplying gas and electricity to its 17 million British Gas customers fell by a quarter, to £165 million, during the first six months of this year.

Plans to sell the Onetel telecoms business were drawn up so the company could focus on stabilising its British Gas business, which lost 505,000 accounts in the first half on top of the 1.1 million customers who quit last year.

Details emerged just days after Centrica hit households with a 14.2 per cent hike in the cost of supplying their energy.

The sale of Onetel, which provides fixed-line, mobile phone and internet services to some 1.7 million customers is intended to allow the company to focus its "capital and resources on energy and home related services".