The firm has around 108,000 domestic and 21,000 business customers.

Customers are urged not to panic as under Ofgem’s safety net, their energy supply will continue as normal and any outstanding credit balances will be protected.

Ofgem said it will choose a new supplier to take on Extra Energy’s customers as quickly as possible and this supplier will contact customers shortly after being appointed.

If you’re an Extra Energy customer, the regulator’s advice is not to switch supplier but to take a meter reading ready for when the new supplier contacts you.

This, it said, will make the process of transferring customers over to the chosen supplier, and paying back any outstanding credit balances, as smooth as possible.

The collapse of Extra Energy comes on the same day Ofgem proposed tougher tests for new suppliers before they’re granted a licence.

Among the measures, which are due to come into force in spring 2019, applicants for new supply licences will have to prove to the regulator they have the funds and resources to manage their business for at least the first 12 months.

The energy watchdog was prompted to take action following the collapse of five other smaller suppliers this year.

Future Energy, National Gas and Power, Iresa Energy, Gen4U and Usio Energy, which had over 117,000 customers between them, have all gone bust in 2018.