LAST WEEK I began hearing whispers that British Gas had dropped troubled Dublin-based electronic payments group Payzone as its bill pay provider.

British Gas is one of Payzone’s biggest utility partners and the contract is worth several million a year. Its loss would be a blow to the loss-making and heavily-indebted Irish company, which is led by chief executive Mike Maloney and backed by Balderton Capital.

The suggestion that the contract was moving elsewhere was rebuffed by Payzone, but an inquiry to British Gas yielded a somewhat different response.

“British Gas continually reviews contracts with third-party providers to make sure we offer our customers the best possible service and value. Our current contract with Payzone expires in December 2010. Following a comprehensive review, we have decided not to renew this contract. Payzone has been informed of our decision. Over the next two years the numbers of British Gas customers using Payzone services will reduce as more of our customers use the payment services at the Post Office and [rival firm] PayPoint.”