Competition watchdogs have cut by nearly £50m their fines on major supermarkets and milk suppliers over price fixing in UK dairy markets, after ditching two of their three investigations.

The Office of Fair Trading said that, after more than two years of investigations, it had "insufficient" evidence to support claims that retail giants such as Asda and Sainsbury and dairy groups including Robert Wiseman Dairies and Dairy Crest had colluded to prop up milk and butter prices.

"As a result, the individual penalties that a number of early resolution parties had agreed to pay will be reduced," the OFT said.

Cheese claims outstanding

However, the OFT, whose investigations date back to 2002 and 2003, said it was still investigating price fixing in the cheese market, over which the supermarkets and milk producers face fines totalling £70m

The accused companies, which also include subsidiaries of Ireland's Glanbia and French-based Groupe Lactalis, have accepted liability in principle under competition law.

Robert Wiseman said it had agreed to a reduction of £1.9m to £4.2m in its part of the fine, which will be payable after the OFT concludes its investigation in the summer.

Arla, the Danish co-operative behind Lurpak butter, is on track to avoid a fine after agreeing to co-operate with the OFT investigations.