MPs on Thursday voted to partly nationalise city heating networks in a bid to restore public confidence after homeowners and tenants faced steep price increases.

The new legislation states that both existing and future district heating networks must be more than 50% owned by the Dutch state.

The government is keen to nationalise the networks as a sweetener to encourage people to stop using gas-fired central heating. Officials believe they would be more willing to make the switch if they were not being forced into the hands of a private company, with no choice of supplier.

Households connected to district heating systems, which typically use surplus heat from industry or waste incineration, have no choice but to use them, regardless of the fees being charged.

Climate minister Sophie Hermans called the vote an “enormous step forward” for the future of district heating.

The law aims to resolve years of conflict between energy companies, housing corporations and local authorities about pricing. Several major projects in Amsterdam, The Hague and Utrecht have been on hold because of the disputes.

Currently, around 500,000 homes in the Netherlands are connected to a district heating network. Another 500,000 connections are planned by 2030 to meet climate targets, although Hermans said on Thursday this will not be met.

The legislation includes a 10-year transition period to keep commercial energy firms such as Vattenfall and Eneco involved.