Government called upon to help failing energy firms

the market. But it could relieve stress on the market in the short term.

Multiple options are believed to be suggested such as VAT or green levies on energy bills being frozen or reformed to ease the burden on prices. It may be difficult to suspend green levies as the revenue raised is used to support vulnerable and low-income households.

Mr Kwarteng is understood to have received the proposals and will examine a range of ideas.

Separately, it emerged last night that Bulb, one of the largest challengers to the big providers, is on the hunt for an injection of new funding.

The loss-making renewable energy supplier has been working on raising funds from investors and exploring the possibility of merging with a rival.

It was among the energy firms in talks over gas prices with the Business Secretary over the weekend.

The rising wholesale prices of energy in recent weeks have pushed up the cost of providing new tariffs, meaning families that are transferred are likely to be hit with higher bills.

Government sources last night confirmed that the energy price cap would remain in place to provide a level of protection to consumers.

If a backup supplier cannot immediately be found to take on the customers of a collapsed firm, Mr Kwarteng said contingency plans provide for the Government to step in and appoint a special administrator to keep the failing company afloat temporarily to ensure continuity of supply to consumers.

Clive Moffatt, a former adviser to the Government on energy security, warned that prices for industry could go “through the roof ”.

Energy-intensive sectors such as steel production, glass, ceramics and paper are among those most at risk from soaring energy costs.

Mr Kwarteng insisted he was “confident” that physical supply of gas could be maintained “under a wide range of scenarios”.

The chair of the NHS Confederation, Lord Adebowale, yesterday warned he is concerned about the impact on CO2 supply.

Speaking to Times Radio, he said: “CO2 is used in a number of interventions in the NHS … so we have to prioritise the NHS in all this because otherwise people will suffer.”