According to the association, the watchdog closed yesterday with its service being amalgamated into Consumer Focus, which will also encompass Postwatch and the National Consumer Council.

The FSB states lobbying has resulted in an energy ombudsman being created for small businesses, but says this development has not been widely publicised.

John Holbrow, environment and energy policy unit chairman for the federation, says companies are already under strain due to high prices and a volatile market.

‘We are continuing to lobby for better representation of small businesses in the new set-up,’ he adds.

He states good news for small firms is that under the new plans the electricity and gas regulator Ofgem will be placing energy companies under more scrutiny.

Conservative MP Peter Luff describes the decision to scrap energywatch as a ‘spectacularly bad idea’, especially in a time of rising prices.