Ministers are drawing up a national register of approved retrofit installers and arming regulators with powers to ban poor performers after the home insulation scandal left up to 23,000 properties needing repair work.

The move comes after a blistering National Audit Office investigation found that 98% of external wall insulation installations inspected under government-backed schemes were defective, with homes blighted by damp, mould, water ingress and, in some cases, electrical and fire hazards.

Under plans unveiled yesterday, only installers meeting government standards will appear on a public register designed to steer householders towards reputable firms carrying out energy efficiency upgrades.

Installers and delivery partners that repeatedly fall short of required standards would be barred from working on government schemes.

The new regime will also introduce a data-led monitoring system to track installer performance and flag emerging quality problems before they spiral into another industry-wide failure.

The reforms are intended to prevent a repeat of the breakdown exposed by the NAO, which estimated that between 22,000 and 23,000 homes with external wall insulation now require remediation. Less than one in 10 affected homes has so far been fully repaired.

The watchdog also uncovered suspected fraud worth between £56m and £165m linked to thousands of potentially false claims for insulation work.

Ministers are simultaneously strengthening protection for households caught up in defective schemes.

The Installation Assurance Authority has increased the value of repairs it will fund for faulty ECO4 and Great British Insulation Scheme solid wall insulation to £25,000 per property, up from £20,000. The protection also covers cases where the original installer has gone bust, provided the guarantee remains valid.

The National Energy Foundation will also fund repairs for some households where installers have collapsed and guarantees are missing, fraudulent or cancelled.

Energy consumers minister Martin McCluskey said: “This government inherited a broken system that left too many people in homes damaged by work that lacked clear oversight, without support when things went wrong.”