MILLIONS of families face being clobbered with higher gas and electric bills after ministers admitted more energy firms will fold in coming days.

       Kwasi Kwarteng scrambled to reassure a worried nation “there is no question of the lights going out” this winter - as wholesale prices rocketed to their highest ever level.

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       The cost of wholesale energy has rocketed since January to a record 150 dollars per barrel 3

       'There is absolutely no question of the lights going out', says Business Secretary

       The Business Secretary is drawing up emergency plans to offer state-backed loans to big energy firms to encourage them to take on customers from collapsed firms.

       But as customers are forced to switch suppliers, they are likely to be forced on to higher tariffs.

       Experts are also warning of a ￡300 increase in the energy price cap next spring.

       After days of turmoil caused by the global spike in gas prices, Mr Kwarteng tried to reassure the nation there was no need to panic.

       Small energy suppliers in the UK are going to the wall because the energy price cap means they have been unable to pass on the full cost of the price hike to consumers.

       Defying calls to bail out small firms directly, Mr Kwarteng said the Government will not “reward failure” as he said more could fold “this week”.

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       He vowed to keep the cap to protect families from being stung by sky-high price hikes — and he refused to rule out a publicly owned energy company being created to help stricken Brits.

       Mr Kwarteng told the Commons: “We have more than sufficient capacity to meet demand and we do not expect supply emergencies to occur this winter.

       “There is absolutely no question of the lights going out or people being unable to heat homes. There will be no three-day working weeks or a throwback to the 1970s.

       “Such thinking is alarmist, unhelpful and misguided.”

       And he added: “The global situation may see more suppliers than usual exiting the market but this is not something that should be any cause for alarm or panic.

       “The Government will not be bailing out failed companies. There will be no rewards for failure or mismanagement.

       “The energy price cap, which saves 15 million households up to ￡100 a year, is staying.”

       The cost of wholesale energy has rocketed since January to reach a record 150 dollars per barrel of oil.

       This has caused a string of small energy suppliers, who gambled on offering ultra-low deals in the hope prices would not rise, to fold or be plunged into crisis.

       Stricken firms have blamed the energy price cap for the crisis, and begged No？10 for bailouts.

       Chris Burke, chief operating officer at Colorado Energy, which has 15,000 customers and is teetering on the edge, said: “The price movements we are seeing in the market are unprecedented.”

       Mr Kwarteng is working on proposals that would see major surviving energy giants offered massive loans to lure them into taking on new customers.

       He hopes this will convince the big firms to take on punters, even though it may be unprofitable in the short term.

       These customers are not expected to be guaranteed the same ultra low prices of their old providers and put on a new tariff.

       People’s Energy, which went bust last month, was charging ￡909 a year for its lowest tariff.

       Its customers have all been shifted to British Gas, but now have to fork out ￡1,277 for the same bills.

       Another option being looked at is the “bad bank” option, based on the Northern Rock disaster in 2007.

       Under this option, customers from all the failed suppliers would be bundled up into a so-called bad bank, which the state would run through the winter.

       This would mean the taxpayer would have to pick up the bill for the extra costs.

       But even if firms limp on through the winter, there is gloomy news on the horizon as experts warned regulators Ofgem is expected to hike the price cap next April by up to ￡300.

       The boss of one big energy firm poured cold water over the Government’s plan to get them to take on stranded customers.

       He said: “In the past, we could absorb it but with wholesale costs rising and smaller firms in huge debt it doesn’t make sense for us to bid for the new customers.”

       Four suppliers have folded in the past week, including Edinburgh-based People’s Energy, which supplied 350,000 homes and 1,000 businesses, and Dorset-based Utility Point with 220,000 customers.

       The number of energy firms has already tumbled from 70 to 50 since January and experts warn just ten may survive the winter.

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       Smaller energy firms have collapsed

       Boom and bust More energy firms could go bust, Kwarteng admits