Energy supplier Bulb serving an estimated 1.7 million customers could fall into administration next week.
Sky News reports that ministers along with the energy regulator believe that the company could collapse in the following days.
The reported collapse of Britain’s seventh-biggest energy supplier could mark the biggest insolvency during the energy crisis that has hit the UK market.
Sources said that talks with potential buyers were still taking place on Friday.
Since August 14 energy suppliers went bust as they were not able to absorb the impact of gas price hikes.
A Bulb spokesperson told ELN: “Our discussions with multiple parties to secure additional funding continue to make good progress and we’re encouraged by the drop in wholesale energy prices.
“We expect the government to monitor wholesale prices and their effect on the whole industry, but ministers and Ofgem have been clear we must emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past.”
An Ofgem spokesperson said: “There has been an unprecedented increase in global gas prices which is putting financial pressure on suppliers. We know this is a worrying time for many people and our number one priority is protecting customers.
“In the event a supplier fails, Ofgem and government have robust processes in place to ensure customers’ electricity and gas supply continue and domestic customers’ credit balances are protected.”