The Irish Small and Medium Enterprises organisation (Isme) has criticised the Government's decision not to break up the ESB.
Isme said the move was a retrograde step that will prevent competition in the marketplace and lead to further price increases.
The Government rejected proposals put forward by consultants Deloitte for the partial break-up of the ESB. Deloitte said high labour costs and poor plant maintenance were costing the consumer up to €100 million in additional costs.
Details of the study of the ESB emerged yesterday in Dublin at the publication of the Government's energy Green Paper. Towards a Sustainable Energy Future for Irelandis the first Green Paper on the subject for almost 20 years.
But Minister for Natural Resources, Noel Dempsey, said it was important that there be "a critical mass in the ESB", adding he wanted the State-owned power generator "to be a strong company".
He said the break-up of the ESB could lead to higher prices and endanger security of power supplies and competitiveness.
Isme chief executive Mark Fielding said: "It is extremely disappointing that the Government commission a report by Deloitte into the ESB and then decide to reject the main recommendations.
"This is absolutely ludicrous and shows a complete lack of understanding or acceptance of the impact of rising energy costs, particularly on the small business community," he said.
"How can a Government that outwardly proclaims to encourage competition on the one hand, dismiss recommendations to increase competition on the other and in the process bolster the ESB's dominant position?" he added.
Mr Fielding said Isme accepted there was a case for the retention of a strong commercially viable ESB, but not at the expense of competition.
"Once again the Government has abdicated their responsibilities to the public and the business community by protecting an institution that through high labour costs and other inefficiencies is adding €100 million to costs compared with similar operations abroad and forcing the consumer to pick up the tab," he added.