Water bills will rise from 2005

Severn Trent Water wanted to put up charges by 27% but the watchdog has told them this increase is too large.

Instead, they will be held to a 16% increase, which means about �36 on the average bill.

Severn Trent Water has said the increases were vital for them to continue improving their system.

We will raise our great disappointment with Ofwat that householders face a very high increase in bills in April 2005 Sir James Perowne, WaterVoice

Steve Hodgeson, a spokesman for Severn Trent Water, confirmed they will be entering a series of negotiations with Ofwat.

He said: "The overall priority is we need to make sure these essential services are funded properly, not just for the next five years but for the long term.

"We need to make sure we can provide what our customers told us is their main priority, which is protecting the reliability and safety of their tap water, which is the best in the UK."

WaterVoice Central, the local consumer body for water, said Ofwat deserved only "muted credit" for its decision.

Chairman, Sir James Perowne, said: "Ofwat's Director General, Philip Fletcher, deserves our muted credit for cutting back on the massive price hikes that the industry bid for.

"Although he has rigorously scrutinised company business plans, any rise will be a disappointment to hard pressed customers.

"We will raise our great disappointment with Ofwat that householders face a very high increase in bills in April 2005 - 10% in the case of Severn Trent."