Water rates could be brought in as early as 2005

The government has unveiled a consultative document setting out plans for a �3bn investment programme.

No specific cost per household has been identified.

But, Stormont regional development minister Angela Smith said that "if domestic water and sewerage charges were introduced today, Northern Ireland households would have to pay up to �400 on average each year".

She said: "Charges would continue to rise as investment levels increase and, without a major programme of reform and cost reductions in the delivery of services, Northern Ireland households would pay the highest water and sewerage charges in the UK.

"I want to ensure that the future charges are as fair and affordable as possible. This will require changes in the way that services are managed and delivered."

The minister said public consultation on the reform options will run until 20 June.

It is too early to be specific about what the precise impact will be Angela Smith NIO regional development minister

She said: "The reform programme will consider the most appropriate basis for charging for water and sewerage services, the most effective business model for delivering these services and how best to promote the customer interest and protect the environment under the new charging regime."

The minister said that reform would require cost savings to be made if charges are to be affordable.

She said: "It is too early to be specific about what the precise impact will be until the preferred business model is identified.

"However, it is important to point out that the process may result in the closure of some offices and depots and the relocation or reductions in the number of some posts across the organisation.

"There will be full and open consultation with staff and trade unions on all proposals for change."

The document also sets out various options for a restructured water service, ranging from a government organisation to a not-for-profit company as is the case in Wales. Privatisation is not ruled out.

There would also be some form of water regulator to rule on the quality and value we get.

Under EU rules, some form of water charge for households in Northern Ireland must be in place by 2010.

However, water rates could be brought in much sooner, as early as 2005.

Domestic water metering would hit the poorest families on low incomes the hardest Joe Byrne SDLP assembly member

The union NIPSA, which represents over 1,000 staff in the Water Service, accused the government of a "knee-jerk" reaction to European directives on water charging.

Spokesperson Bumper Graham said: "The minister is expecting the Northern Ireland population and the Water Service workforce to pay for the years of neglect by direct rule administrations in looking after the Water Service's infrastructure."

The DUP's Peter Robinson said "government must cut the cost of bureaucracy before looking at the level of taxation".

Mr Robinson said: "With water charges of around �400 per household a year being considered it is essential that the costly bureaucracy associated with the Belfast Agreement is slashed before people are asked to pay more for services they are already funding."

Meanwhile, Sinn Fein's Francie Molloy said: "Water charges of �400 per household will hit people who are least able to pay hardest."

Mr Molloy said: "Water charges will not be eligible for the rate rebate system so people on low incomes and particularly people on benefits will proportionately pay the most. That is clearly unfair and unacceptable."

SDLP assembly member Joe Byrne, said he was concerned by the proposals.

"We want to see more investment in public services but not on the basis of domestic water metering which would hit the poorest families on low incomes and people on benefits the hardest," he said.

General Consumer Council chief executive Maeve Bell said if the public was to be charged more for water, they need to know exactly what they are being asked to pay for.