Regulators have called for an investigation into the UK's Big Six energy suppliers amid soaring household bills and rocketing profits.
Ofgem's finding that aspects of energy firms' behaviour "would appear to be consistent with tacit coordination" has been denied by Centrica.
The inquiry into the 'Big Six' energy firms is a significant moment, but don't hold your breath, it will take the best part of two years.
The chief executive of Centrica, which owns British Gas, has welcomed the major competition inquiry into energy firms but said a lengthy review could damage investment when the market's "security is being seriously challenged."
Sam Laidlaw said: "Anything that clears the air and helps rebuild trust in the industry must be a good thing. Britain's energy market is highly competitive and we believe that a full independent review by a respected regulatory authority would demonstrate precisely that.
"Competition is working, providing choice for consumers and some of the lowest prices in Europe.
"We hope that a lengthy review process will not damage confidence in the market, when over £100 billion of investment in new infrastructure is needed.
"A prolonged period of uncertainty could damage investment at a time when Britain's energy security is being seriously challenged."
Energy Secretary Ed Davey will give Ofgem "whatever support they need" after the watchdog announced a major competition inquiry into the 'Big Six' energy firms.
The Department of Energy and Climate Change's Twitter account tweeted:
Ofgem's decision to launch a major competition inquiry into the 'Big Six' energy firms marks a "good day but very, very late day", the founder of MoneySavingExpert.com said.
Martin Lewis told Daybreak: "Why now and not five years ago when it could have made a difference?
"Will it mean lower energy prices? I think the hope is a more fluid market will mean relatively lower prices...but don't expect to see your bills coming down by 20 to 30% - that isn't going to happen."
He added: "There's visceral anger that some people in this country have to choose between heating and eating, so I'm glad to see it happen but I do have a little bit of annoyance that there's nothing in this report we didn't know. Why has it taken so long?"
The energy industry will be putting the consumer "at the heart of what we do", a representative for gas and electricity firms told Daybreak.
Chief operating officer for Energy UK Lawrence Slade admitted providers "had not done enough in the past" and said the roll out of smart meters would help customers cut down their energy usage.
A major competition inquiry into the 'Big Six' energy firms will be "bad for jobs in the UK, bad for investment and it will do nothing for consumers apart from maybe delay the relentless rise in energy bills until after an election", a union has warned.
The warning from GMB comes after SSE announced yesterday it will cut 500 jobs as part of a cost-cutting programme.
– Gary Smith, GMB national secretary for energy
This is designed to kick the issue down the road until after the next election.
The country is in the midst of an energy crisis. Energy bills are going to keep going up. Households will struggle to pay their bills and British industry is losing competitiveness.
The market is being propped up by huge subsidies. Electricity wholesale prices across Europe are dropping. Desperately needed investment has been slashed.
Regulator Ofgem has defended its ability to regulate the energy industry and said it was "doing everything" to make the market "fully competitive".
Ofgem's Rachel Fletcher explained: "We can say that this investigation will work in parallel with really important reforms we have already put forward for consumers."
ITV News Business Editor Joel Hills has tweeted:
OFGEM says retail profits rose from £233m to £1.1bn in last 3 years with "no clear evidence" of companies becoming more efficient.
A major competition inquiry into the 'Big Six' energy firms shows "the energy market is broken" and that a price freeze is "needed for all customers", Labour's shadow energy secretary said.
– Caroline Flint, Labour’s Shadow Energy and Climate Change Secretary
Yesterday's price freeze from SSE showed that a price freeze is possible. Today's confirmation that the energy market is broken shows that it's needed for all customers.
That's why the next Labour Government will freeze gas and electricity prices until 2017 and reform the market to break up the big energy companies and make tariffs simpler and fairer.