Energy regulator Ofgem would be charged with enforcing the cap – initially until 2020 but the chance of an extension until 2023.
Government insiders furious at Ofgem for dragging their heels insisted the legislation would take effect as “soon as possible”.
But the move sparked a mutiny among Tory MPs who complained that their Government had gone too far.
Backbencher Desmond Swayne stormed: “I want to escape this Marxist universe. We capped university fees and low and behold all the universities charged the maximum.
“Can he persuade me that electricity will be any different?”
John Penrose – a Tory who has campaigned for action for the past year – called it a “great day”.
Former Shadow Energy Secretary Caroline Flint urged Greg Clark to “stop wasting time” amid claims it could take a YEAR for the cap to be introduced.
She stormed: “I have to ask the Secretary of State, will he admit that his proposal today will not help many millions of customers who need help this winter?”
Former Labour leader Ed Miliband – who was slammed by David Cameron for demanding an energy price freeze in 2013 – welcomed Greg Clark “to the party”.
But he said: “I still think that his voyage into a Marxist universe is a bit slow, if I can put it this way.
“Because it’s a draft Bill, it’s four months since the general election, he’s said there would be help this winter, he could have chosen to fast-track this with the frontbench, and get the help in now.”
Shares in British Gas-owner Centrica rose 3 per cent amid the row.
Greg Clark last year said the Government had a “duty to act” to stop the Big Six “abusing” loyal customers by charging as much as £300 more on standard variable tariffs than on cut-throat online deals.
Insiders claim Ofgem could act now to enforce a cap by changing licence conditions. Ofgem claim they would be immediately challenged in the courts by the energy companies without legislation in place to back them up.
E.ON chief exec Michael Lewis yesterday insisted a price cap would “not be good for customers”.
But campaigners said the German-owned supplier was still charging SVT customers £225 more than those on cheaper tariffs.
Will Hodson, co-founder of the Big Deal collective switching site said: “This price cap is hugely welcome.
“Big Six companies have been overcharging their most loyal customers for years and years.
“The temporary nature of the cap is fine for now but it’s important that the Government is willing to extend the cap and even make it permanent if the Big Six companies don’t mend their ways.
“The challenge is now for suppliers, and switching sites, to find new ways to prevent British consumers from being ripped off.”