Energy firms are being urged by the Government to bring forward voluntary plans to ensure customers can switch to the best deals - or face legislation forcing them to do so.

In an open letter to the bosses of gas and electricity suppliers, Energy Secretary Chris Huhne calls for them to offer their ideas within the next fortnight and reach an agreement by the end of the summer.

If a voluntary deal cannot be reached, he is threatening to use powers in the Energy Bill to impose requirements for companies to make bills clearer and help people save money by switching to the most cost-effective tariffs.

The Government believes eight million households are paying more than they need to simply because they do not pay by direct debit, for example. Action on the issue was part of the Coalition Agreement.

Mr Huhne said: "I want to see a voluntary agreement with the industry this summer, but if this isn't forthcoming I will use our new powers in the Energy Bill. Putting this information on bills will help people find out if they are getting the best deal. If they find they are not, they can do something about it.

"With fewer than one in five people shopping around and switching energy company a year, people are missing out on the opportunity to save, in some cases, literally hundreds of pounds."

In his letter, Mr Huhne urged the energy bosses to take personal charge of the issue and bring forward plans before a meeting between ministers and the Energy Retail Association on July 14.

"I therefore look forward to your proposals for providing the information to consumers within the next fortnight, to the opening of formal negotiations, to a swift agreement and for additional helpful information on consumer bills at the earliest opportunity," he wrote.

Christine McGourty, director of industry representatives Energy UK, said: "Energy companies have been working closely with DECC this year to trial new ways to encourage customers to engage with our competitive energy market and ensure they are on the best possible deal for them.

"As part of the trials almost two million new bills have been sent to customers and 600,000 information leaflets. The companies are continuing to work closely with DECC to ensure customers get the best possible information on their bills."