Pennon Group's operating profit went up to �161m last year as consumers face bills rising faster than inflation.

St Ives MP Andrew George claims the profit news will be met with dismay.

He says Environment Minister David Miliband should freeze share dividends and control what he calls "a licence to print money".

'Hard-pressed'

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

Mr George said: "For thousands of hard-pressed water rate payers, particularly those on low incomes, the news that water company shareholders have awarded themselves another payout will be met with dismay.

"Not all companies need to reassure their shareholders with guaranteed annual dividends.

"They could reassure them that the company is doing well by increasing the company's share price."