The firm supplies water to about eight million customers

The company, which provides water for most of the Midlands, said the cuts are needed to keep bills low and create revenue for investment in services.

The price rise will mean customers paying about 70p a day from April.

While it is not clear where the jobs will go or whether there will be compulsory redundancies, Unison said it was considering a ballot over action.

If supported by our members we will ballot for industrial action Andy Main, Unison

Jonathan Bailey, from Severn Trent, said it had to meet targets set by the water regulator Ofwat.

"We are recognised as one of the most efficient water companies in England and Wales.

"Yet we have to become even more efficient to make sure we keep bills low and can continue to invest �1m a day for the next five years."

Unison regional organiser Andy Main said: "Our members will struggle to understand why, after a positive price review, jobs need to be lost.

"In the last five years the company has already lost 1,100 jobs and cut costs to the bone. These latest job cuts will seriously affect customer service.

"Unison members work hard to ensure customer safety and a healthy and secure water supply in the area.

"If supported by our members we will ballot for industrial action."