British Gas owner, Centrica PLC, and two other major energy suppliers have lost their High Court challenge over the UK government's handling of the sale of collapsed energy firm Bulb.
Scottish Power, E.ON and Centrica claimed an "unfair sale process" led to decisions "to commit billions of pounds of taxpayer money to facilitate the acquisition of a failed business" by rival firm Octopus Energy.
The three businesses brought legal action against the government, alleging its decision-making process was "flawed and unlawful".
But in a ruling on Friday, Lord Justice Singh and Justice Foxton rejected the legal challenge.
The judges concluded: "In circumstances in which the Octopus transaction was the only bid to emerge from a lengthy merger & acquisition process which the Secretary of State was entitled to conclude was open, transparent and competitive, that was an assessment lawfully open to the Secretary of State."
They added: "It was open to the Secretary of State on the material before him to conclude that the other options were inferior to proceeding with the Octopus bid, involving significant execution risks and higher forecast costs."
Octopus welcomed the ruling: “The High Court’s findings are clear: Octopus paid a fair price for Bulb in an open and competitive process.”
“The High Court was equally clear that there was no merit at all in the case brought by British Gas and the other legacy companies.”
Centrica said the ruling was "disappointing" and that it would now "consider our options.”
A spokesperson said: "We think state bailouts for energy companies puts a burden on the UK taxpayer and is avoidable.”
"We felt the original bailout of Bulb was unnecessary and the National Audit Office report this week concluded there were risks and uncertainties in recovering these funds from Octopus."