British Gas has said it will stop switching people onto prepayment meters via their smart meters when they struggle to pay their bills.
It comes amid growing calls to stop the practice, which critics say puts vulnerable people at risk.
Citizens Advice said forcible switching should be banned, adding it had seen a big rise in clients needing crisis support such as emergency grants.
Ministers are also preparing to write to regulator Ofgem about the issue.
The boss of British Gas, Chris O’Shea, said his company would stop remote switching smart meters onto prepayment mode and add extra vulnerability checks.
Britain’s biggest energy company has also promised £10m of extra support for customers in need, which could include non-repayable credit of up to £250 for those struggling the most to top-up their meter.
“We know that some prepayment customers are self-disconnecting and not coming forward for help, so we have reviewed our policies to do more to target support at this group,” he said.
However, the energy supplier has not ruled out forcibly installing prepayment meters in people’s homes.
People using prepayment meters pay for their gas and electricity by topping up their meter, either through accounts or by adding credit to a card in a convenience store or post office.
This is a more expensive method of paying than by direct debit, but is sometimes the only option for people who have struggled to pay and are in debt to an energy supplier.
However, critics say it leaves vulnerable customers at risk of running out of credit and “self-disconnecting” when they cannot afford to top up.
Last year, an estimated 600,000 people have been switched to prepay, according to Citizens Advice, either by their supplier physically installing a meter in their home, or automatically having their smart meter switched to prepay mode.
In a letter to Ofgem, the Department for Businesses is expected to call for greater scrutiny of whether these switches are justified.
Energy suppliers point out that if customers are allowed to build up unaffordable debts, then this money would eventually be recouped from everyone’s energy bills.