Energy giant British Gas has been fined £2.5 million by the energy watchdog for failing to deal with complaints correctly.

British Gas, which serves nearly half of the UK's households, failed to re-open cases when customers indicated their complaint had not been resolved, Ofgem found.

The regulator also said the company failed to provide key information about the energy ombudsman to customers when complaints were not resolved and put in place a process to deal with businesses with 10 employees or fewer.

Ofgem said British Gas breached regulations setting standards for complaint handling which came into effect in October 2008.