More than one million UK small businesses may face insolvency as they are stuck in high-cost energy tariffs, which were fixed when prices reached a historical peak last year.

Trade groups are urging the government to intervene and force suppliers to renegotiate contracts or risk damaging the UK economy and jobs.

British Chamber of Commerce and Federation of Small Businesses surveys reveal that around one million of the UK’s 5.5 million small businesses were coerced or mis-sold long-term energy contracts at peak market prices.

The Confederation of British Metalformers (CBM) has described the energy supply situation for small manufacturers as the “biggest mis-selling scandal since PPI”, in a letter to the Energy Secretary, seen by the Guardian.

The CBM’s president, Stephen Morley, warned that this could jeopardise the British manufacturing sector and benefit energy suppliers and brokers at the expense of UK competitiveness.