Business leaders are urging suppliers to release small companies trapped in energy contracts fixed at eye-watering rates.

The Federation of Small Businesses (FSB) has issued an urgent plea for suppliers to renegotiate fixed contracts for those small businesses stuck with market-peak tariffs following last year's energy crisis.

It said more than one in 10 were swept up in the crisis as they renewed contracts during the market peak last year.

Around 93,000 small firms now say they could be forced to close, downsize or radically restructure their businesses, the FSB warned.

The government's Energy Bill Relief Scheme ran out on March 31 and was succeeded by the far less generous Energy Bills Discount Scheme - hitting those stuck on high tariffs facing huge bills.

FSB development manager Candy Richards warned many small businesses in East Anglia were "still very much in survival mode" because of "sky-high" contracts.

“Having come out from a tough winter, this spring is supposed to be the beginning of economic recovery," she said.

"Last year, many small businesses agreed to lock in energy contracts to ensure they qualified for the maximum level of government support.

"Now, with that support largely disappearing, they are once again faced with massive energy bill hikes as rates go back to pre-Energy Bill Relief Scheme level.

"If ending the successful support scheme is on the basis that wholesale energy prices have gone down, then our research sheds light on just how many small businesses have been overlooked as they are trapped in high fixed tariffs."

There were signs local small businesses might be about to turn a corner after last year's crisis - and giving them a way out of the peak rates some signed up to would help, she said.

"It’s disheartening to see a significant proportion of small firms facing the very real prospect of having to close, downsize, or radically restructure their businesses just when we need to grow our economy.

"Our community shrank by 500,000 small businesses over the two years of Covid. We shouldn't now be adding any more to that gruesome tally.

"The least that energy suppliers should do is to allow small businesses who signed up to fixed tariffs last year to ‘blend and extend’ their energy contracts, so that their bills are closer to current market rates."

She called on the government and energy watchdog Ofgem to support the FSB initiative.

Some firms will end up paying three or four times what they were paying when the more generous government support scheme was in place, she added.

FSB research shows 13% of small firms fixed their energy bills between July 1 and December 31, 2022, during which businesses were quoted up to £1 per kWh for electricity. 

Many are from the accommodation and food sector (28%), and the wholesale and retail sector (20%), it found.