Richard Ackroyd will begin as CEO in March

Richard Ackroyd will replace Mr Hargreaves who is taking early retirement after five years in the job.

Mr Ackroyd, who was previously at Yorkshire Water, will start his new role from March 2008.

Douglas Millican, Scottish Water's director of finance and regulation, will act as interim CEO.

Scottish Water chairman Ronnie Mercer said: "I am delighted to welcome Richard to Scottish Water and the team.

"We are determined to continue delivering value for money to all our customers and Richard's leadership and experience will help us build on our success."

Waste water

In June, the Water Industry Commissioner for Scotland said that while customer service in Scotland was still not as good as in England it had improved "considerably".

The report also said household bills had risen by 3% less than inflation while bills south of the border had risen by 7%.

Scottish Water is a publicly-owned business, answerable to the Scottish Parliament.

It provides water and waste water services to 2.2 million households.

Yorkshire Water was privatised in 1989 and has been part of the Kelda Group since 1999.