Bulb Energy, which has 1.7 million customers, has announced that the firm will be put into administration.
It is the largest UK energy company to face difficulties following a sharp rise in wholesale gas prices this year.
Bulb will become the first energy company to be placed into "special administration", where it is run by the government through the regulator Ofgem.
"Customers of Bulb do not need to worry - Bulb will continue to operate as normal," Ofgem said.
"Customers will see no disruption to their supply and their account and tariff will continue as normal. Bulb staff will still be available to answer calls and queries."
The special administration measure is only used if Ofgem is unable to find another company to take over an energy firm's customers. The regulator said it was planning to apply to a court to appoint an administrator who will run the company.
Bulb said energy supplies were "secure and all credit balances are protected".
Bulb is the UK's seventh biggest energy company and has 1,000 staff. It has been trying to shore up its finances for several weeks.
Ofgem set up the Special Administrator Regime (SAR) for when an energy company goes bust but is too big to have its customers transferred to another firm.
The aim of the regime is to stop financial failure spreading across the industry.
Under the SAR scheme, the government can make grants and loans to the company while its future is sorted out.
It could come in the shape of a takeover by another company, selling parts of its business or customers being transferred to another firm.
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