With 2 million gas and electricity customers, the new $1 billion retail business would be larger than NSW’s EnergyAustralia and able to compete with Australia’s top energy companies, Australian Gas Light and Origin Energy, according to the newspaper.

But the office of Queensland premier Peter Beattie has dismissed the claims, saying a decision had not been made to merge the companies, although all government-owned companies were being currently reviewed.

This follows related news in late September that Queensland would float its retail market to let private companies compete for the consumers and small businesses currently serviced by state-owned Energex and Ergon Energy.

The move means that from July 2007, Queensland electricity customers will have the choice of staying on their existing tariffs, seeking a better deal from the government or changing to a new company provider.