The consumer group Which? said the cost of fitting the digital meters would fall on hard-pressed consumers, but the benefits would be reaped by energy companies which have announced record profits in recent years.
Ministers want energy companies to install the new generation of high-technology meters, which allow users to monitor their energy use in real-time, in all homes by 2020.
The flagship policy is a key part of plans to make the UK more energy efficient and was initially introduced by Ed Miliband, the Labour leader, while serving as energy secretary in the last government.
Smart meters will save energy giants hundreds of millions of pounds in administration costs as they will no longer have to pay staff to read meters.
Supporters say they will also enable consumers to reduce their energy consumption and take advantage of cheaper off-peak tariffs.
However, Which? said there is increasing evidence that consumers do not use less gas or electricity once a smart meter is installed.
It also said that some meters already installed can only be used with one energy provider – thereby discouraging home owners from shopping around for the best deal.
Richard Lloyd, executive director at Which?, said: "Consumers won't accept [smart meters] at any cost, or from suppliers they don't trust. It's naive to hope that competition in the energy market will keep under control the cost of installing smart meters in every home in the country.
"The Government must not write a blank cheque on behalf of every energy customer, especially at a time when millions of people are struggling to pay their bills.
"The energy department should stop and review the smart meter roll-out before it becomes an £11 billion fiasco."
A report by the Centre for Sustainable Energy, commissioned by Which? and seen by The Sunday Telegraph, states that there is a "meaningful risk … that the programme will fail consumers".
This week the Public Accounts Committee, a powerful panel of MPs, is also expected to publish a critical report on the introduction of smart meters.
British Gas, which has already installed nearly 400,000 smart meters in homes and business, urged the Government to continue with the programme.
Gearóid Lane, managing director of British Gas New Markets, said: "Our customers have told us loud and clear about how they are benefiting from smart meters.
"Smart meters put an end to the frustration of estimated bills, give customers more direct control over their energy use and open the door to new energy saving technologies.
"There is more to smart meters than just cost savings, and any slowdown of this crucial investment will frustrate energy customers."
Charles Hendry, the energy minister, said: "As Which? themselves reported last week, the major cause of complaints to energy companies is poor and inaccurate billing.
"Smart meters will mean more accurate information and an end to estimated billing – so no more nasty surprises for consumers.
"The benefits of smart meters are £18.1 billion for an £11 billion investment – that's a £7 billion net benefit to the nation, and we want to realise it sooner rather than later."
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