Britain's big six energy companies will face fines unless they open up the electricity market to competition from independent rivals, under proposals by Ofgem.

The regulator has outlined a series of measures designed to "break the stranglehold" of the six firms which dominate the UK market – British Gas, EDF, E.on, Npower, Scottish Power and Scottish and Southern Energy (see our Cheap Energy Club for help getting the best deal).

Ofgem says it wants to create a more level playing field for independent rivals to buy and sell power, to push down prices for consumers. Smaller suppliers include Co-operative Energy, Ecotricity, Ebico and First Utility.

Under its plan, the big six will not be allowed to refuse any reasonable requests from small suppliers to buy electricity from them.

Selling to small firms

The big six have been told they must sell power to the smaller companies at a fair price and negotiate fairly at all times. The energy companies will be given deadlines for acknowledging and responding to requests.

In addition, the big six will have to post prices at which they will buy and sell power for up to two years in advance.

The changes are expected to come into effect next year, after a consultation this autumn.

Energy Secretary Ed Davey says the Government is ready to bring in new laws should Ofgem's measures be "delayed or frustrated".

Andrew Wright, senior partner for markets at Ofgem, says: "Our aim is to improve consumer confidence and choice by putting strong pressure on prices through increased competition in the energy market."