We hope that Welsh Water/Dwr Cymru will eventually put the contract out for open tender

Brian Duckworth, MD Severn Trent

The challenge was launched in the High Court and Mr Justice Langley delivered his reserved judgement while sitting at Winchester Crown Court.

He ruled that Severn Trent had the right to challenge Western Power's decision to award management of Welsh Water to Cheshire- based United Utilities.

The judge's decision is likely to have a marked effect on the way utilities sub-contract their work in the future.

Severn Trent MD Brian Duckworth said the company was looking forward to the next round of its challenge.

Open tender

"Severn Trent is determined to be a strong player in both supply chain competition and for new customers.

"We have always been committed to ensuring that a level playing field is established for all players.

"We hope that Welsh Water/Dwr Cymru will eventually put the contract out for open tender.

"At that stage Severn Trent would be delighted to compete for the business."

The ruling follows a lengthly bidding war for control of Wales' water utility between WPD and Japanese bank Nomura.

Throughout the lengthy bidding war for control of Hyder, American-owned Western Power made it clear it would let United Utilities run the water business on their behalf - a plan that has led to worries about possible job losses.