The decision will see the five out of six firms that run Britain’s local electricity network undertake the work to improve reliability and accelerate new connections to the network.

The new package, when combined with the business plan from Western Power Distribution, takes the total proposed investment in the next eight years to £24bn.

From April 2015, compensation payments for customers who experience power cuts will increase, more than doubling from £27 to £70 for those without power during severe weather.

The programme will be supported by Ofgem’s Low Carbon Network Fund, which will deliver about £900m of benefits to consumers as a result of the deployment of cutting-edge smart grid technologies.

In November 2013, Ofgem rejected five network companies’ price control proposals doe to their failure for delivering better value for customers. Since then, £2.1bn has been cut from the proposals.

Ofgem chief executive Dermot Nolan said: "Today’s plans represent good value for consumers. There will be significant investment in Britain’s electricity network, and reduced pressure on bills.

"Ofgem expects network companies to step up and take a more visible and active role in helping customers, particularly the most vulnerable."