It follows a report that agents broke into the homes of vulnerable people to install the equipment.
British Gas has suspended the force-fitting of prepayment meters, after a report said it imposed them on vulnerable customers.
The Times reported a company employed by British Gas broke into homes to fit the meters, despite signs that children and disabled people were living there.
Business Secretary Grant Shapps said he was “horrified” by the findings.
British Gas’s owner Centrica said it would suspend the use of court warrants that allow forced installations.
Centrica said the suspension would last “until at least after winter” and that protecting vulnerable people was its priority.
It comes amid the rising cost of living and as household bills soar in part due to mounting energy costs.
The allegations centre on Arvato Financial Solutions, a third-party company used by British Gas to pursue debts.
In an undercover investigation, The Times said its reporter went with Arvato Financial Solutions’ agents to the house of a single father, with three children.
After establishing the property was unoccupied, the reporter observed the agents work with a locksmith to force their way in and install a prepayment meter.
Agents also fitted a prepayment meter by force at the home of a young mother with an infant baby, the newspaper said.
Others who experienced similar treatment, according to materials seen by The Times, include a mother whose daughter is disabled and a woman described as having mobility problems.
Chris O’Shea, the chief executive of Centrica, described the allegations relating to Arvato Financial Solutions were “unacceptable” and that they had immediately suspended the company’s warrant activity.
He said he was “extremely disappointed” about what had occurred, adding: “As a result, on Wednesday morning, we took a further decision to suspend all our prepayment warrant activity at least until the end of the winter”.
Mr O’Shea said the firm had “clear processes and policies” to ensure it manages customer debt safely.
Business Secretary Grant Shapps said: “I am horrified by the findings of this investigation.”
“Switching customers – and particularly those who are vulnerable – to prepayment meters should only ever be a last resort and every other possible alternative should be exhausted,” he said.
“These findings suggest British Gas are doing anything but this.”
Mr Shapps said the energy minister would hold a meeting with British Gas “in the coming days,” adding: “He will be demanding answers to ensure this systemic failure is addressed.”
A spokesperson for energy regulator Ofgem said: “It is unacceptable for any supplier to impose forced installations on vulnerable customers struggling to pay their bills before all other options have been exhausted and without carrying out thorough checks to ensure it is safe and practicable to do so.”
People using prepayment meters pay for their gas and electricity by topping up their meter, either through accounts or by adding credit to a card in a convenience store or Post Office.
This is a more expensive method of paying than by direct debit, but is sometimes the only option for people who have struggled to pay and are in debt to an energy supplier.
Many rented properties also have prepayment meters.
Problems can arise when residents no longer have any credit left on the meter, and have no money to top it up – leaving them unable to cook or heat their homes.
Last month, the Citizens Advice charity called for a ban on energy companies “forcing” customers onto prepayment meters because they are struggling to pay bills.
In response to The Times, Gillian Cooper, head of energy policy at Citizens Advice, said: “It’s truly shocking to see the extent of bad practices amongst some energy suppliers.
“Our frontline advisers know only too well the desperate situations so many struggling customers have found themselves in. Time and time again we have called for a ban on forced prepayment meter installations until new protections for customers are brought in.
“Ofgem and the Government need to act now – serious reforms must be made before these suppliers can be trusted again.”
BBC News has contacted Arvato Financial Solutions for comment.
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