Bristol City Council has given the go-ahead to put its loss-making energy company up for sale.

Mayor Marvin Rees said Bristol Energy has faced ‘unprecedented challenges’ since it was established by his predecessor in 2015 and no more funds would be invested.

The sale was agreed in a closed session and follows a confidential council-commissioned report by Ernst & Young.

Mr Rees said: ‘We have tried to work in the best interests of the city and Bristol Energy customers, but been unable to divulge the challenge we were tackling as this would have further disadvantaged us against competitors.’

The company has posted losses of £32.5m, despite the council committing £36.5m, prompting demands for an inquiry from opposition parties last week.

Following yesterday’s meeting, Conservative opposition leader Cllr Mark Weston said: ‘If we are very lucky then no more money will be wasted, but I fear even in winding up the company there will be additional costs.

‘There is certainly no chance of us getting back the tens of millions already sunk into this failed venture.’

Cabinet lead for companies, Cllr Craig Cheney, said: ‘We have worked tirelessly to try and turn the company into something that is not only profitable but also offers more to citizens in terms of social benefit as this was always the vision when we took it on.’

Bristol’s move follows the attempted sale of Portsmouth City Council’s Victory Energy, which failed to attract a buyer.

Last month, Nottingham City Council reported its venture, Robin Hood Energy, had made a £23m loss and has appointed accountants to review the company.