Breaking up the Big Six energy firms is “not needed”, according to the markets watchdog.
The Interim report by the Competition and Markets Authority (CMA) has stated large firms “do not collude to drive up prices”.
However, it added it will recommend new initiatives for switching to cheaper providers.
The CMA even suggest reversing a new policy which restricts the number of tariffs on offer.
It also argues it has been “too easy” for the traditional players to make significant profits and will recommend new initiatives to introduce innovation and encourage customers to switch to cheaper providers.
The Big Six are EDF Energy, npower, E.ON, Scottish Power, SSE and British Gas.
The decision could frustrate some campaign groups and the Labour party, which under its former leader, Ed Miliband, had promoted the policy in a bid to break the 90% market share they hold in the retail market.
Laura Hill, a spokeswoman for the Fuel Poverty Action groupsaid it would be “laughable” if switching was emphasised over breakup as it would put the responsibility for the current problems on customers, not companies.
She said: “Blaming energy customers for the big six’s exploitative antics is disgraceful and will not end the hardship millions of households suffer during the winter months.”