British Gas is facing the threat of strikes over the festive season in a worsening dispute over new contracts.

Thousands of members of the GMB union will vote on whether to launch a campaign of industrial action, although the elderly and vulnerable in homes without heating will be exempt.

British Gas owners Centrica confirmed that negotiations on terms and conditions have ended, adding that a revised proposal has been put forward.

The company said it has lost more than one million customers in two years, with many choosing lower priced products from competitors.

It added it has lost over half its earnings over the past 10 years.

The company said it has “no choice” but to make changes to its terms and conditions to modernise and win back customers from competitors.

The union accused the company of threatening to fire and rehire 20,000 workers if they do not accept changes to their pay and conditions.

GMB warned them that members were angry, with a 95% vote for action in August

An indicative ballot in August showed that most members would be in favour of industrial action if there was a vote.

GMB national officer Justin Bowden said: “British Gas issued an ultimatum in July to fire and rehire 20,000 workers in the middle of a national health emergency.

“GMB warned them that members were angry, with a 95% vote for action in August.

“We sought to get the threat off the table. The best that they were prepared to do was postpone the ultimatum until January.

“This is an insulting response to these essential workers – keeping homes across the nation heated in the depths of winter.

“Anger has boiled over as members have now seen the full proposals and how they impact them.

“GMB has responded by giving the go-ahead for an official national strike ballot. We will shortly announce the dates for the ballot.

“All the signs are that a national strike in the gas industry is weeks away if British Gas don’t stop their playground bullying tactics which threaten to disrupt energy supplies and services to customers over the Christmas and New Year period.

“GMB’s plans will exempt vulnerable elderly households from the impact of the action.”

A Centrica spokesman said: “To win back customers from our competitors and reverse the decline of our business we must have flexibility to give customers what they want, at a price they want and when they need it.

“Our current terms and conditions are stopping us doing this and modernising the way we work is critical to our success.

“Since July we’ve spent over 300 hours in genuine and constructive negotiations with our unions, resulting in significant upward movement from our initial proposals.

“We are focused on turning our business around and protecting the well-paid and highly skilled jobs of our colleagues.”

Centrica said it had made clear that base pay and pensions will be protected, adding that the changes reduce the wage bill by around 1.5%.