The move comes as the Grenfell Tower inquiry reveals that manufacturers ignored safety rules and rigged safety tests.

The government has also announced that an independent review will examine faults in the system and recommend how abuse can be prevented.

The regulator for construction products will have the power to remove any product from the market that presents a significant safety risk and prosecute any companies who flout the rules on product safety. It will also have the ability to conduct its own product-testing when investigating concerns.

The move comes as the government comes under increasing pressure to fund the removal of cladding from hundreds of tower blocks that have similar cladding to Grenfell Tower, or other flammable cladding.

Thousands of leaseholders of flats have been billed five-figure sums for remediation work to their homes – despite purchasing them in good faith and on the understanding that they adhered to fire safety and building regulations.

Housing secretary Robert Jenrick MP said: “The Grenfell Inquiry has heard deeply disturbing allegations of malpractice by some construction product manufacturers and their employees, and of the weaknesses of the present product testing regime.

“We are establishing a national regulator to address these concerns and a review into testing to ensure our national approach is fit for purpose. We will continue to listen to the evidence emerging in the Inquiry, and await the judge’s ultimate recommendation – but it is already clear that action is required now and that is what we are doing.”

The regulator will operate within the Office for Product Safety and Standards (OPSS) which will be expanded and given £10m in funding to establish the new function. It will work with the Building Safety Regulator and Trading Standards to encourage and enforce compliance.

The government has also commissioned an independent review to examine weaknesses in previous testing regimes for construction products, and to recommend how abuse of the testing system can be prevented.

It will be led by a panel of experts with regulatory, technical and construction industry experience and will report later this year with recommendations.