Co-operative Energy will take on all 160,000 customers of collapsed firm GB Energy on their existing price tariff.

The firm said it would also honour outstanding credit balances for both current and past customers.

Energy regulator Ofgem said if customers wished to change energy provider they would be able to do so without any exit charge.

Ofgem said it had chosen Co-operative Energy after "a competitive process to get the best deal possible".

All GB Energy's staff will be transferred on the same terms to Co-operative Energy.

Credit to be recognised

Ofgem said the cost of protecting customers' balances would be funded partly by Co-operative Energy and partly by its safety net, funded by a levy paid by all energy firms.

Co-operative Energy said it would contact all GB Energy customers "over the coming days" with information on their tariff and credit balance.

It said any credit on current customers' accounts would be used to offset future energy use.

"Our advice for customers of GB Energy Supply is to wait until Co-operative Energy contacts you. They will give you more information about the tariff you are on, and about your credit balance," said Ofgem's senior partner for consumers and competition Rachel Fletcher.

GB Energy ceased trading at the weekend, blaming recent rises in energy prices.

The firmGB Energy Supply said that as a "small supplier" business had "become untenable".