The Office of Fair Trading (OFT) is to launch a preliminary investigation unit to screen new cases amid mounting public pressure to put its house in order.
The new department will investigate matters on a preliminary basis and decide whether new cases ought to be considered by the regulator or not.
Interviews for the post of unit head are expected to take place in March, with the department of at least 10 staff due to start work later this year.
The changes are set to be implemented after a damning National Audit Office report criticised the efficiency of the OFT. They also reflect a growing trend among European regulators to encourage big business to pursue litigation as a means of dealing with competition issues, similar to the US system.
Director of the OFT's competition enforcement division Vincent Smith admitted that the regulator needed to manage its workload and prioritise certain cases.
"I'm stopping short of saying we've taken on cases that we shouldn't have, but there is concern," he said. "One thing we've not been good at is explaining why we've taken on cases and we do need to be clearer about that… We did discuss these changes with the National Audit Office."
While most competition lawyers agree with the move, some say the regulator needs to go further. DLA Piper Rudnick Gray Cary competition partner Mike Pullen said: "The school fees case was a classic example of the OFT wasting time and money… The OFT should consider all cases put to it because it's the regulator and that's what it's there for."