Scottish Water said it would be sympathetic over the bills

Scottish Water believes an employee of a sub-contractor hired to read meters in the Aberdeenshire town could either have made mistakes or not read them.

Some firms paying estimated bills have found they owe thousands of pounds.

But H2O Water Services, which took the readings, said they had checked more than 100 meters which were correct.

Complaints against bills started in early August.

Some companies told Scottish Water their normal charges of a few hundred pounds a month had risen dramatically.

We will be dealing with customers sympathetically Scottish Water spokesman

An investigation was launched and it emerged the affected firms had all been paying bills based on estimated readings of meters.

Scottish Water believes the problem may date back about two years.

A Scottish Water spokesman told BBC Scotland: "This may be down to one person who has either not been taking the meter readings or has been taking the meter readings incorrectly.

"We are investigating that matter.

"We are going back to customers on a one-to-one basis and will be dealing with them sympathetically and talking to them about how they can pay off the amount of money they owe us for the water they have legitimately used from us."

A spokesman for H2O Water Services said it had dismissed a rogue reader about 12 months ago, but said he had worked in another part of the north east.

The spokesman said investigations were continuing but added that there was so far nothing to indicate that its staff were contributing to the situation in the Peterhead area.