The reforms follow two years of research into the energy market and interaction with consumers.

The new rules will tackle problems of widespread consumer confusion over energy tariffs, poor supplier behaviour and lack of transparency which the watchdog says is stifling competition.

Among the key changes, suppliers will only be allowed four “core” tariffs, price increases to fixed term tariffs will be banned and all information sent to consumers will be simplified, more engaging and personalised to them.

Andrew Wright, senior partner for markets at Ofgem, said: “Our reforms today are the blueprint for the simpler, clearer and fairer energy market that consumers deserve.

“Now that our proposals have been confirmed it also gives suppliers a unique opportunity to forge ahead, building on the progress some have already made, and begin to restore trust in the energy market. Further hesitation will only delay benefits for consumers.”

Ofgem will implement a ‘standards of conduct’ in a few weeks to ensure consumers are treated fairly.

Once in place companies face investigation and possible fines if they fail to treat consumers fairly.

Ann Robinson, director of consumer policy at uSwitch.com, said: “Simplicity and information are only part of the picture. Consumers need to feel confident, which is why we would urge Ofgem to go the extra mile not just with these reforms but in now educating consumers about how the market works and how they can get the best value. Educated, confident and empowered consumers are key to sparking a healthy, competitive market.”