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British Gas has apologised after it told a customer it was sending his details to a debt collector for a £2,500 bill which the energy supplier had charged in error.

John Spink received a letter in April saying he owed the large sum following months of seeing his gas and electricity bills spiral after he had a smart meter installed in his home.

Despite several letters, emails and phone calls with the help of a neighbour objecting to the bill, British Gas told the 79-year-old his details had been passed on to a debt collection agency.

But after being contacted by ³ÉÈË¿ìÊÖ Money Box, the energy supplier apologised and confirmed Mr Spink, from south-east London, did not in fact owe any money and would be compensated £500.

"This has now been resolved and we can see from Mr Spink’s smart meter readings that his gas usage is very low," a spokesman said.

"We’ve confirmed that his account balance is currently zero, he won’t receive any further reminders, and a goodwill gesture is on its way."

British Gas was at the centre of a scandal last year when it emerged debt agents working for the energy supplier had broken into vulnerable people's homes to force-fit prepayment meters.

The revelation led to a public outcry before all suppliers were told to halt such practices by the energy watchdog, before being given permission to resume forced fittings under stricter rules in April.

Mr Spink first received a bill of more than £4,000, which jumped to £6,700 by Christmas last year.

It dropped down in April, but was still £2,500 when he received a message from British Gas which said his details had been passed on to a debt collection agency because he had not paid it.

The pensioner does not have access to the internet or a phone, but was helped by his neighbour Angela to complain to the company.

"I was absolutely astounded (by the bill)," Mr Spink told ³ÉÈË¿ìÊÖ Money Box.

"I have lived in this house now for nigh-on 30 years now but I have never had bills for more than £60 or £70 for a quarter.

"They said in one letter they were going to come round to my house to see what the situation was and if anyone had come round I was going to read the riot act to them... what the hell do you think you're playing at?"

Mr Spink's neighbour Angela said the pair kept phoning British Gas to contest the incorrect bill but added it was "like constantly banging your head on a brick wall".

"I would ring them up, speak to someone and then another letter would come about debt collection and I would have to go through all that again and speak to someone totally different," she said.

"They never returned the calls that they promised they would. He would come and wait for a phone call and nobody would ever ring back and it was really worrying."

Mr Spink said he felt the situation was handled "appallingly" by British Gas and he was being "fobbed off half the time" over the past nine months.

He added that unless Angela had helped him the situation would have "gone on for years".

British Gas described Mr Spink's situation as a customer service problem and it had resolved the incorrect bill before being contacted by the ³ÉÈË¿ìÊÖ, but had not told him about doing so.

The supplier also denied that it had actually sent Mr Spink's details to a debt collector, despite two letters stating it had done.

Citizen's Advice said it was a rise in the number of people seeking help for what it described as "aggressive debt collection tactics" by energy suppliers.

The energy regulator Ofgem said it expected suppliers to "act compassionately", adding it had toughened up rules for companies to follow when dealing with people who were struggling to pay bills.