Ernst & Young, the accountancy firm, has withdrawn a controversial report on China?s non-performing loans, saying its estimate of bad debts for the country?s big four state banks ?cannot be supported and ? is factually erroneous.?

The announcement comes days after the report was attacked by the People?s Bank of China, the central bank, as ?ridiculous and barely understandable? and at odds with the firm?s own auditing of Chinese banks.