Plans to merge the Office of Fair Trading (OFT) and the Competition Commission will see a dramatic shake-up of Britain's competition regime.
The Cabinet Office said it will launch a consultation in the new year over its aims to scrap the long-standing "two tier" system.
It wants to save cash by bringing together the competition functions of the two watchdogs, so that the new body will still have responsibility for investigating company mergers, cartels and issues of unfair market dominance.
But the proposals will see the transfer of the OFT's consumer and enforcement responsibilities - understood to be earmarked for Citizens Advice and the trading standards divisions of local authorities.
Both maintained that yesterday's announcement was welcome news. Peter Freeman, chairman of the Competition Commission, said: "We welcome the Government's commitment to a strong competition policy and look forward to working with all concerned to build a new, strong, competition authority."
John Fingleton, chief executive at the OFT, added the regulator had "advocated the merger of the Competition Commission with the OFT for some time".
"With the right design, a single competition and markets authority can deliver better, faster results for consumers and the economy, and greater consistency for businesses," he said.
The move is seen as being one of the more controversial in the quango overhaul, although it is thought the former Labour government had also been poised to merge the two last autumn before a last minute u-turn.
The business sector is largely behind the move, as it promises to cut some of the time involved in market investigations.
On the other side, there are fears that the tie-up could weaken the Government's powers to tackle anti-competitive behaviour.
Market inquiries can take several years to complete under the current system, with initial OFT probes often lasting a year before referral to the Commission.
The Commission effectively starts its investigation from scratch on referral from the OFT, while the appeals process draws the process out even longer.