BRITAIN'S competition watchdog is being urged to investigate the merger between SSE and the owner of Npower amid fears that the deal will spell bad news for energy consumers.

Rachel Reeves, chair of the Business, Energy and Industrial Strategy (BEIS) Committee, has asked the Competition & Markets Authority (CMA) to launch a "full investigation" to see if there is any risk to competition within the energy market.

The pair announced last month that they have reached an agreement to merge their operations, worth a combined £3 billion, to create a new energy supplier in the UK.

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The deal will see SSE and Npower's parent company, Germany's Innogy, combine their household energy supply and services business in Britain, turning the Big Six energy suppliers into five.

The MP said in her letter: "The energy market isn't working for consumers.

"The proposed merger between SSE and Npower risks damaging the development of a more competitive energy market, reducing consumer choice, and threatening to be a bad deal for energy consumers.

"The CMA needs to look at the potential impacts of this merger and launch a full investigation if there is any risk to competition within the energy market."

It comes as Britain's energy firms brace for a raft of regulatory changes after the Government announced earlier this year that a price cap will be imposed on poor-value energy tariffs.

SSE said that the merger will help the firms compete in a "competitive and regulatory environment" as well as realise efficiency savings.

SSE, formerly known as Scottish and Southern Energy, is Britain's second biggest energy supplier and the merged group will serve around 11.5 million customers.

Centrica, Iberdrola (SocttishPower), E.On and EDF make up the remainder of the Big Six.