The supermarket giants, Asda and Sainsbury's agreed to pay massive multi-million pound fines after admitting to fixing the price of milk, cheese and butter.

The matter relates to pricing during 2002 and 2003, estimated at a cost of about £270 million to consumers.

The supermarket giants are among a group of stores and dairies to admit colluding over prices and have agreed to pay massive settlements.

Other firms that have also admitted to price fixing in the investigation by the Office of Fair Trading include fellow supermarket Safeway, prior to its takeover by Morrisons, and dairies Robert Wiseman, Dairy Crest and The Cheese Company.

The OFT will continue with its case against supermarkets Tesco and Morrisons and dairy company Lactalis McLelland, which have not admitted to price fixing.

Sainsbury's, which has agreed to pay watchdogs a settlement of £26 million, said its action to collude over prices was “designed to help British dairy farmers at a time of considerable economic pressure and public debate about whether farmers were getting a fair price for their products".

Asda said in a statement its intention was also to "provide more money for dairy farmers, who were under severe financial pressure at the time".

Dairy Crest is expected to pay a fine of £9.4 million, while fellow dairy Robert Wiseman had agreed to pay £6.1 million.

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