JOHN MOGG, a former European Commission director general, was unveiled yesterday as successor to Callum McCarthy as chairman of gas and electricity regulator Ofgem.

The widely-expected appointment will see the 59-year-old take up his post in October, replacing Mr McCarthy, who is leaving the regulator to chair City watchdog the Financial Services Authority.

Trade and Industry Secretary Patricia Hewitt said, "John will inherit a strong, independent, regulatory body which commands wide respect, and we look to him to continue to develop it from that robust baseline.

"(His) wealth of experience in successfully tackling difficult issues in relation to UK and European markets will stand him in good stead as the sectors face up to change."

Mr Mogg joins Ofgem at a time when the gas and electricity markets right across Europe are facing major challenges.

He will be a part-time, non-executive chairman, following the decision to split the roles of chairman and chief executive.

The separation of roles is designed to give the chairman freedom to focus on developing a strategy for regulating gas and electricity industries and to provide leadership and direction for the authority members and the chief executive.

One of Mr Mogg's first tasks in his £90,000-a-year role will be to lead the search for a chief executive. He has been appointed to the post for five years.

Britain's battered electricity sector has suffered from sharp falls in wholesale prices during Mr McCarthy's tenure, leaving some on the brink of crisis.

One of the best-known casualties was nuclear giant British Energy, which was saved from insolvency when the Government stepped in with a life-saving £650m loan earlier this year.

The Scottish generator is working on a restructuring plan with creditors to provide a permanent solution to its problems.