Water firms are reaping healthy profits at present

United, formed by the merger of North West Water and Norweb in 1995, saw pre-tax profits rise to �481m ($898m).

At the same time, utility group Pennon, which owns South West Water, unveiled a 25% rise in annual profits to �111m.

The results come as environment secretary David Miliband holds a drought summit with regulators, water firms and consumer groups.

United Utilities company said its reservoirs were more than 90% full and that it expected to avoid the need for water restrictions this summer.

It also said it had spent �441m on water and waste water investment last year, while also meeting leakage targets set by regulator Ofwat.

"United Utilities has again delivered good profit growth," said United's chief executive Philip Green.

Meanwhile, Pennon's results were boosted by bigger bills and a strong performance at its Viridor Waste unit.

Last year Ofwat told Pennon it could raise household bills for its South West Water customers by 25% in real terms over five years.

The results come a day after Anglian Water owner AWG announced a trebling of profits to �109m for last year.