Energy supplier npower has admitted it paid virtually no corporation tax between 2009 and 2011.

The stunning revelation comes after its CEO Paul Massara(pictured)was grilled by MPs on Parliament’s energy watchdog today, along with other suppliers such as E.ON, SSE, EDF and British Gas.

The German-owned provider has around 6.5 million customers and generates more than 10% of the electricity used in England and Wales.

In a statement today, the firm denied it had engaged in “tax avoidance” and said it made losses in its retail business in 2009 and 2010.

The statement said: “Looking at RWE npower specifically, our investment programme since 2008 has amounted to almost £3billion, which means we have seen a large increase in tax relief. This, combined with the losses in our retail business for 2009 and 2010, reduced our taxable profits to the point where we paid almost no corporation tax. We do however pay substantial employment and property taxes”.

The supplier said it has pumped £5billion into the UK since 2008 including two new gas fired power stations and a number of wind farms, adding: “This is in no way tax avoidance and all of our business is taxable in the UK. We’ve not paid corporation tax because we’ve been investing hundreds of millions to keep the UK’s lights on.”

Big corporations like Amazon have come under fire in the UK recently for paying minimal tax through a series of tax loopholes. Starbucks recently agreed to pay up after a campaign saw coffee-drinkers avoid its stores until the firm paid its full share.

npower’s confession could prompt similar upset if the public doesn’t accept its explanation.