This means Electric Ireland - the new name for ESB's supply business - will not need to seek approval from the Commission for Energy Regulation if it wants to raise or reduce prices for consumers.

The CER said it was making the move because of strong competition in the domestic market, with the ESB's share falling below the 60% level targeted by the regulator. The CER said around a million people had switched their electricity supplier since early 2009.

The energy regulator has decided to allow the ESB to set its own electricity prices for residential customers from April 4.

This means Electric Ireland - the new name for ESB's supply business - will not need to seek approval from the Commission for Energy Regulation if it wants to raise or reduce prices for consumers.

The CER said it was making the move because of strong competition in the domestic market, with the ESB's share falling below the 60% level targeted by the regulator. The CER said around a million people had switched their electricity supplier since early 2009.

The regulator had also called for the ESB to re-brand its supply business before it deregulated the market completely.

'Deregulation of prices will help provide further choice and competitive prices in the long run,' said CER chairperson Michael Tutty.

ESB welcomed the decision, with chief executive Padraig McManus describing it as a 'significant milestone' for the company.

Last year, Mr McManus said the ESB would match any offers being put forward by its competitors - who include Bord Gáis and Airtricity - when the market was fully opened up, but the CER warned ESB customers last year not to expect significant drops in their bills as a result of the move.

Bord Gáis welcomed the CER's decision, but warned that the regulator had the responsibility to ensure that the market operated in a fair way. It also called for the similar opening up of the gas market for residential customers without delay. The regulator currently sets the prices Bord Gáis can charge consumers in the gas market.