UK power networks was accused yesterday of avoiding millions in tax even as it admitted it was "not prepared" for the storms over Christmas which left thousands of its customers cut off for days.

The energy giant was accused of an alleged tax dodge estimated at £38 million in levies owed to government over the past three years.

The UK Power tax scam allegations centre around £164.4m reportedly paid via the Cayman Islands to firms controlled by Asia's richest man Li Ka-shing.

UK Power Networks, formerly EDF Energy Networks, was acquired by the Hong Kong tycoon's Cheung Kong group in 2010.

Responding to the tax allegations, a UK Power spokesman claimed it "fully complies" with all applicable regulatory, tax and legal requirements.

Meanwhile winter storms continue to batter Britain with increasing fears of floods and severe weather warnings for gales of up to 80mph affecting Wales and south-west and southern England.

The company, which supplies electricity in south-east and east of England, said it would increase compensation payments for 48 to 60-hour outages from £27 to £75 for those affected on Christmas Day as a "goodwill gesture."

Additional payments will be made to customers who have been without electricity for longer than that time - up to a maximum of £432.

UK Power Networks chief executive Basil Scarsella said: "We could not have avoided the damage caused by the storm but we could have responded to it better."

Energy Secretary Ed Davey demanded a "clear public timeline for work to get power back on" in talks with the supplier.

Regulator Ofgem warned energy companies they would face sanctions including loss of revenues and compensation payments to customers off supply if they failed in their duty to restore power as soon as possible.

The Energy Networks Association said about 3,000 homes across Britain were still without electricity yesterday.

And a section of the M69 motorway was shut yesterday morning after black ice caused seven accidents within a short space of time.