Watchdog Ofgem said on Tuesday that Iberdrola's Scottish Power did not appropriately monitor its doorstep and telephone sales agents, which led to the misleading information being given - a breach of its marketing licence conditions.

The money will be used to set up a 1 million pound fund to compensate those affected and to provide 7.5 million pounds to a discount scheme for vulnerable customers such as the elderly.

"We accept Ofgem's findings and we apologise unreservedly to those customers affected," Scottish Power's Chief Executive of Energy Retail and Generation, Neil Clitheroe, said.

The company said the breach happened after it failed to properly implement new regulations that were introduced in 2009. It said since 2011 it had taken steps to resolve the problem by stopping doorstep selling and monitoring telephone sales staff.

Energy companies in Britain have come under fire after three of the "big six" suppliers hiked their prices.

RWE npower raised its household electricity and gas charges on Monday by an average of 10.4 percent on Monday - almost four times the rate of inflation.

Earlier this month, Centrica raised its prices by an average price of 9.2 percent while SSE announced an 8.2 percent increase.

In a separate statement, Ofgem said new rules taking effect on Tuesday would ban energy suppliers from raising prices on fixed-term tariffs, and would also stop them from automatically rolling households on to another fixed-term offer when their current one ends.

(Reporting by Lorraine Turner and Brenda Goh; Editing by Pravin Char)

Stocks treated in this article : Iberdrola SA, RWE AG, SSE PLC, Centrica PLC