United Utilities has been told to continue its service improvements

The company, which supplies water to customers across the North West, said pre-tax profits for the first half of the financial year came in at �282m.

But it has been warned by watchdogs that it must now improve service and make bills more affordable.

The Warrington-based firm was allowed to raise bills by 8.8% in exchange for investment in its water network.

On Tuesday, it said its water business was on track to meet its leakage target for the first time in four years.

But it also announced plans to sell support services firm Vertex, based in Liverpool, to focus on its core operations of water, sewerage, electricity and gas.

Consumer confidence

Chief executive Philip Green said the move would make the company a "world class operator of utility infrastructure".

Water customers across Cumbria, Lancashire, Greater Manchester, Merseyside and Cheshire saw bill rises in 2006.

This co-incided with the Consumer Council for Water (CCWater) receiving 1,138 complaints about United Utilities in the six months up to 31 March - a 41% rise from the same six months in 2005.

Andrea Cook, Chairman of CCWater North West, said: "Customers have seen above inflation increases in their water and sewerage bills over recent years whilst shareholders are receiving growing dividends.

"They understandably question whether the correct balance is being struck or whether shareholders benefit at their expense."

Mrs Cook said the watchdog welcomed recent improvements in service standards by the company.

But she added that the industry still had a lot of ground to make up to regain consumer confidence.