Companies have complained of massive rises in bills

CBI Scotland will say that all options should be reviewed - including privatisation if necessary.

The comments are being welcomed by the Scottish Conservatives, who argue firms are being placed at a "serious disadvantage".

The CBI will say that businesses have become a soft touch for Scottish Water, with companies across the country facing increases of between 50% and 300%.

For example, the BP plant in Grangemouth faces a water bill of �13m, while a comparable refinery south of the border will pay just �7m.

Other options

Iain Macmillan, of CBI Scotland, said Scottish companies and the public may now be paying the price for water remaining in public ownership.

During a lunch in Edinburgh on Friday he will call on the Scottish Executive to examine other options - including mutual ownership by customers or full privatisation.

Scottish Conservative enterprise spokesman Murdo Fraser said that such comments echoed what his party had been saying for some time.

The Scottish Executive must take action now, as it has been horribly negligent thus far Murdo Fraser Tory enterprise spokesman

He said: "Scottish Water - like any nationalised monopoly - is cumbersome and inefficient, and misallocates resources.

"It is no surprise, then, that I have had vast numbers of businesses complaining to me because their bills have increased by 200, 300 and in some cases 500% this year alone.

"It is simply untenable."

He said water bills, combined with high business rates and "strangulating" red tape, put Scottish firms at "a serious competitive disadvantage".

"We are calling for Scottish Water to be mutualised, so that it is run by and in the interests of Scottish customers and is better equipped to operate in a competitive environment which will drive down bills for domestic and business customers alike," he added.

"The Scottish Executive must take action now, as it has been horribly negligent thus far."