This paper discusses the potentiality of reconfiguring distribution networks into islanded Microgrids to reduce the network infrastructure reinforcement requirement and incorporate various dispersed energy resources. The major challenge would be properly breaking down the network and its resultant protection and automation system changes. A reconfiguration method is proposed based on allocation of distributed generation resources to fulfil this purpose, with a heuristic algorithm. Cost/reliability data is required for the next stage tasks to realise a case study of a particular network.