Water firms to reveal price hike

The UK's largest water and wastewater services company, Thames Water, immediately announced it expected its bills to rise by about 3% each year between 2010 and 2015.

The company, which supplies 13 million customers across London and south east England, said the increases would pay for a £6.5 billion investment in water and sewerage services.

All of the UK's water companies are required to submit their draft investment plans for Ofwat's scrutiny by midday, including how much they expect customers to pay.

In February consumers across the country learned their water bills will increase by an average 5.8% this year, with households in some areas seeing their annual bills soar by an inflation-busting 8%.

Thames Water said its proposals followed a public consultation to find out customers' concerns and priorities.

Thames Water customers currently pay £280 a year on average for their water. The company expects the average bill to increase to £303 in 2010-11 and £329 in 2014-15.

Thames Water chief executive David Owens said: "Thames' customers have enjoyed the lowest bills in the industry for many years, but we now need to make essential investment to secure their services for the future.

"This is particularly true for London, where the water and sewerage infrastructure is ageing. There will be an inevitable impact on bills, but even so, we will be able to keep them below the industry average."

The supplier is currently replacing London's oldest water pipes. Other major projects include the UK's first large-scale desalination plant in east London which will remove salt from water taken from the Thames for use during droughts.