Jon Hargreaves will become chief executive

The executive decided to merge all of Scotland's three water authorities - north, east and west - earlier this year in a bid to rationalise the way services are delivered.

The Water Services Bill, which goes before the parliament next month, will pave the way for changes.

If it is passed by MSPs then ministers plan to have the new single tier authority, Scottish Water, in place by spring 2002.

Announcing the designate appointments to the new body, Ross Finnie, said: "The water industry faces very substantial challenges.

"It faces the challenge of investment, the challenge of competition and the vital challenge of efficiency.

"I believe that only a single authority can secure a public sector industry that can best meet those challenges.

Competitive market

"A single authority can plan its investment on a Scotland-wide basis; it will have the scale and market presence to take on the competition; and it will be best placed to create the efficiencies necessary to give customers value for money.

"Our vision is of a publicly owned Scottish Water authority that delivers a high-quality service to all its customers, is efficient and which can succeed in an increasingly competitive market."

Ross Finnie: "Flying start"

Mr Finnie said the new strategy had "three core elements" - a commercial approach, strong lines of accountability and greater local responsiveness.

He added: "If we are to create a successful public sector model the one thing we do not have is time. For Scottish Water to succeed it must get off to a flying start. That is why I am announcing the top team today."

The GMB union which represents workers in the three current water authorities welcomed the designate appointments.

The union's regional secretary in Scotland, Robert Parker, said: "We believe these individuals have the right blend of public sector background and commercial awareness to take forward a single Scottish Water Authority to meet the challenges of competition, investment and a service delivery."

The union said it would be seeking an early meeting with the new team to discuss job opportunities, customer needs and accountability.

'Contempt for parliament'

But the Scottish National Party criticised the timing of the announcement during the parliament's summer recess.

The party's environment spokesman, Bruce Crawford, said: "By appointing - during the recess - the chair and chief executive designate to Scottish Water the Scottish government have basically held the parliament in contempt.

"There is little opportunity to hold the government to account and the Bill has at this stage not even reached Stage one.

He said that MSPs should have had the opportunity to discuss the appointments and they should not have been confirmed until both men "proved themselves capable of delivering results".