Officials from Ofgas were understood to be finalising the plans over the weekend, which would include a new condition in gas companies' operating licences obliging them to abide by strict marketing guidelines. The draft code includes a seven-day cooling-off period for customers who sign contracts and a requirement that suppliers do not make outlandish claims.
In trials of domestic gas competition in the south of England, some independent suppliers have been reprimanded by Ofgas for allegedly telling customers that British Gas had either gone out of business or "run out of gas".
The statutory code has emerged after months of haggling, in which Clare Spottiswoode, the gas regulator, put her faith in voluntary guidelines policed by the industry. As early as January the Office of Fair Trading convened an industry conference to find a solution. As complaints about dubious sales tactics mounted, Ms Spottiswoode faced pressure from the new Government.
Sue Slipman, director of the Gas Consumers Council, hailed the legally enforceable code as a breakthrough. "We've argued for this all along. The regulator had hoped the market could police itself and we're now pleased she has recognised that it won't."
However, the proposals would need the support of 90 per cent of suppliers to come into force, casting doubt on the chances of an agreement.
The industry is already split over a recently created voluntary body, the Association of Energy Suppliers (AES). Two of the biggest independent gas companies, Calortex and Eastern, have refused to join the AES, arguing it did not fully reflect the concerns of new entrants into the market.
Neil Lambert, joint general manager of Calortex, said he would need to study the Ofgas consultation document closely before agreeing to the new code.