Energy watchdog Ofgem aims to protect small businesses from high energy bills with proposed fines for suppliers found guilty of breaching market rules, it said on Monday.

Under the proposal, Ofgem will impose an enforceable code of conduct on utilities and intermediaries to protect businesses from unfair sales practices, while making it easier to switch suppliers.

Providers that break the rules will be fined, Ofgem said without elaborating.

Ofgem also hopes to gain powers to take enforcement action directly against brokers for misleading business customers, which it currently lacks.

This will greatly increase the protection for businesses, especially for smaller firms, Ofgem Chief Executive Alistair Buchanan said.

As we have demonstrated in the domestic market, we will also take a tough line on any suppliers we find systematically breaching rules designed to protect businesses, he said.

Soaring energy bills and a string of mis-selling cases in recent years have put pressure on government and regulators to make Britain's energy market more transparent and competitive.

The latest proposals mark the second of four waves of reform planned by Ofgem following proposals set out in October that argued for a simpler and more competitive retail marketplace.

The third wave, due in December, will spell out Ofgem's liquidity measures to break the stranglehold of Britain's six dominant energy suppliers, it said.

Energy Minister Charles Hendry welcomed Ofgem's plan.

We ...fully support action Ofgem is taking to boost competition and ensure suppliers are playing by the rules, Hendry said.

(Reporting by Oleg Vukmanovic; editing by Jason Neely)