Half of London's water mains are more than 100 years old

Thames Water's managing director John Sexton is asking industry regulator Ofwat to allow price increases for the five-year period beginning in April 2005, to pay for improvements to piping.

Although Thames Water only serves 15% of the population of England and Wales, it accounts for 25% of all water leaks.

Speaking to BBC London, Mr Sexton said: "We are not penalising customers.

"Customers are getting a very good service - they have the lowest bills in the country.

"We are talking about a very small increase to make sure the good service they get today, is still there in 10 or 20 years time.

�70m plan fails

"I think it is an investment which many customers will be willing to make."

But an Ofwat report last year found the company leaked more than 860 mega-litres per day, that represents a third of its supply.

In March it set the company a tough action plan to help reduce the water loss.

Ofwat's director general of water services, Philip Fletcher, said Thames Water was monitoring the problem, and improving working practices to stem the rising tide of leaks.

About half of London's water mains are more than 100 years old, and 30% are over 150 years old.

But Mr Sexton has said that a �70m plan to stem the leakages had failed.

He added that most of the �6bn invested since privatisation in 1989, had been spent on above-ground equipment to meet Environment Agency standards.