Water bills could rise by a third by 2010

Water companies in England and Wales have put forward proposals which would see the average bill rise by a third between 2005 and 2010.

The regulator Ofwat is reviewing those proposals, but has warned some increases will be inevitable.

Water UK - which represents the 22 companies in England and Wales - has said �21bn in "capital investment" will be needed between 2005 and 2010.

Ofwat has calculated that would entail the average annual water bill rising from �234 to �306 by 2010.

WHAT THE MONEY WILL BE SPENT ON �8.5bn: to replace ageing pipes and sewers �7bn: to improve water quality and the environment �4bn: to cater for future demand

"It is too early to say what the outcome of the review will be," Ofwat head Philip Fletcher was set to tell a water conference on Thursday.

"But hard choices will have to be made about the size of the expenditure programmes the companies are expected to carry out if we are to set price limits that are recognised by customers generally as appropriate and necessary."

'Too much'

But critics suggest some of the touted improvements cannot be justifiably paid for by consumers.

"Under current arrangements, too many water customers will be paying too much for improvements which have too little benefit for them," Maurice Terry, chairman of customer representative body WaterVoice, will tell the water conference in London.

"For example, how many pensioners do we see surfing in wetsuits off the Cornish coast? And yet pensioners in the South West are facing a 22% above-inflation increase in average water bills."

Ofwat will study final business plans from the water companies in April next year before issuing draft price limits in July.