The Office of Fair Trading also claimed a major victory after persuading one of the UK's biggest home improvement companies to drop such a clause.

Surrey-based Limelight Group Plc, which trades under the names of Dolphin Showers, Moben Kitchens and Portland Conservatories, agreed to comply with the OFT's request to scrap a requiring full payment in advance of installation from its standard contract.

The term will be dropped by the end of February 1999.

The director general of the OFT, John Bridgeman, said he welcomed the company's decision and that he had been ready to take Limelight to court if it had not agreed to drop the term.

"I consider that home improvement contracts which require all or most of the payment before work has been carried out are unfair and I expect companies to remove such terms from their contracts," he said.

'Refuse to sign'

"I am delighted that Limelight has done so and I am seeking a similar response from other companies. If they do not do this voluntarily I will seek a court injunction to have unfair terms removed from standard contracts.

"Consumers need to be aware of the advantage to them of keeping back a significant part of the cost of home improvements until the work is satisfactorily completed. It gives them a way of ensuring defects are put right without needing to go to court for compensation.

"My advice to anyone dealing with home improvement companies is to refuse to sign a contract requiring all or nearly all the money to be paid before the work has been satisfactorily completed."