The European Commission has said it will clamp down on anti-competitive practices in energy markets and has pushed for the break-up of big utilities, it was reported today.
The European Union in September is expected to announce a series of legislative proposals and to tackle the contentious issue of unbundling - or forcing big utilities that generate power to sell or spin-off distribution assets to try to stimulate competition.
Analysts say the commission has signalled its determination to be tough and its belief more action is required by announcing a series of anti-trust proceedings.
"The anti-trust proceedings add an element of uncertainty to the companies, which is rarely appreciated, and if there is any hint that there could be fines, clearly this is unwelcome," said Geraint Anderson of Dresdner Kleinwort.
But he said any break up of giant companies could boost share prices, not least because it would make them "more vulnerable to potential takeover".
British companies have already been through the process. Share prices of the incumbents fell following the full opening to competition in 1996 and then in 1997 when the full unbundling of the former monopolies was completed.