The collapse affects around 15,300 households and 8,400 business customers, who are being urged not to switch supplier until Ofgem has appointed a new company to take over their accounts.

Rohan Churm, director for financial resilience and control, said: “I want to reassure Tomato Energy customers that they do not need to worry.

“They will not see any disruption to their energy supply, and any credit domestic customers have on their accounts remains protected under Ofgem’s rules. We are working quickly to appoint a new supplier for all existing customers, and they should not switch in the meantime.

“Once appointed, a new supplier will be in touch with further information.”

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According to reports, Tomato Energy filed a notice of intent to appoint administrators last month, giving it limited breathing space to resolve its financial crisis.

Industry insiders say the firm owes significant debts that must be paid immediately to prevent administrators stepping in.

If the company failed to settle those debts, control would pass to administrators, who will then decide whether the business can be rescued or if it must be wound down.

Energy regulator Ofgem announced on October 13 its intention to impose a £1.5million financial penalty on Tomato Energy for failing to maintain adequate liquidity levels.

The proposed fine relates to breaches of standard licence conditions requiring suppliers to sustain sufficient funds for meeting ongoing financial obligations.

The penalty follows non-compliance with provisional orders issued in April. Ofgem stated: “We are proposing a financial penalty requiring it to pay £1,500,000.

“This is for breaching the standard licence condition that requires it to obtain and maintain liquidity at a level that enables it to pay its ongoing financial liabilities.”

The supplier has amassed debts exceeding £3million, prompting creditors to consider legal proceedings for debt recovery.