Big Four firm Ernst & Young has suffered acute embarrassment in China after it admitted a report it issued on the country’s bad loans was ‘factually erroneous’.

The much-anticipated report, which had to be withdrawn, wrongly estimated Chinese bad loans at more than $900bn (£478bn).

China’s Central Bank called the report ‘ridiculous’.

The country’s banking regulator put China's bad loans at $164bn (£87bn), only one fifth of the estimate given by Ernst & Young.

Ernst & Young said in a statement to Reuters that it would do its best to avoid any repeat of the errors.