Failed energy firm Bulb saw its takeover by rival Octopus Energy completed early this week, after over a year in government handled administration.
Government support for Bulb could top £4.5bn by late March, or roughly £140 each, despite its takeover by Octopus, according to the Department for Business, Energy and Industrial Strategy (BEIS).
Octopus has become the UK’s third largest energy supplier as a result, taking on Bulb’s 1.5mln customers, but faces a legal challenge from competitors E.ON, British Gas owner Centrica and ScottishPower.
A judicial review will be heard in London in February that could potentially see the deal reversed.
Rivals argue that there has been a lack of transparency over the talks between the government and Octopus and the sheer scale of the government bailout is unlikely to sweeten their mood.
A spokesperson for Octopus suggested that funding from the government will eventually be repayed.
Lawyers for the power groups say the deal might also breach EU competition laws, due to Bulb’s Northern Irish customer base, adding the continued government support was not advertised during the bidding process.
“If the claimants had been told subsidies were on offer, that would fundamentally change the landscape in the bidding process,” said Paul Harris, representing British Gas.
“Bulb’s special administrators have run an open and competitive sale process which has identified a buyer for the business,” said BEIS.