Only two million of the 17m Theresa May promised to protect from energy rip-offs ‘to benefit from price cap’

ONLY two million homes could be protected by Theresa May's energy price cap under radically watered down plans from regulators.

Ofgem will today formally reply to Business Secretary Greg Clark's demand for the regulator to end a £1.4 billion rip-off by the 'Big Six'.

And analysts believe Ofgem will be "pragmatic and measured" in a huge victory for the likes of British Gas-owner Centrica.

They claim that - after consultation - Ofgem will likely opt to extend price controls already in place for customers on pre-payment meters to a further 2 million 'vulnerable' households receiving 'Warm Home' benefits.

The idea was originally proposed by Citizens Advice to Ministers last October.

Before the Election, Theresa May vowed to slash £100 off the bills of 17 million customers by introducing "absolute cap" on standard gas and electricity prices.

But the necessary legislation was dumped from Queen's Speech after the June 8 debacle left the PM facing a hung Parliament.

Without a change in the law, Ofgem faces judicial review if it introduces an absolute cap.

Deepa Venkateswaran, analyst at City stockbroker Bernstein said: "The Government has passed the buck to Ofgem.

"We believe that an implementation by Ofgem involving significant consultation will result in interventions that are pragmatic and measured, which significantly reduce the risk of unintended consequences."

Theresa May said 17 million customers were being ripped off by the Big Six as they were stuck on pricey standard variable tariffs which cost far more than online only or fixed price deals.

Ofgem is expected to launch consultation on plans to shake up the energy market in the coming weeks.

Another plan is to call for 'annual tariffs' which would force customers to switch or choose to remain with their supplier.

Tory backbencher John Penrose has called for a "relative" price cap which would set a maximum difference between expensive and cheap tariffs.

Senior Tories demanded Theresa May water down her attack on energy companies in the aftermath of the Election.

Ministers have been desperate to avoid a war on business given fears over the economy and the Brexit negotiations.