Google strange behaviour

[Heat]

This is my story: I am doing work for 2 websites in the same industry, keywords quite the same: www.blinds-wise.com and www.flamingoblinds.co.uk. Back in May, when I have started a linking campain, for the no1 keyword, "blinds uk", flamingoblinds.co.uk was ranked in the 40th positions and blinds-wise.com in the 120th.After a period, in July, they came as no 9 and no 10 on Google. There are links from flamingoblinds.co.uk to blinds-wise.com, but not the other way round. I also have, from our other websites, hosted on the same server/IP, links to blinds-wise.com like from: eshop-wise.com or webdesign-wise.com and so on. Google now returns 1670 links, comparing with 20-30 in May, for blinds-wise.com, many of them as I was saying from the same IP/server. What is it happening now is a major drop from top positions to 21 and 32, progressive fall.
Could you suggest me what could cause this problem? Is it from the backlinks from the same IP address? Am I beeing penalised for this or for something else? Any idea is much appreciated. Thank you in advance.
Best regards.