Thu 16 October, 2003 03:11 BST

LONDON (Reuters) - Water regulator Ofwat says that households are likely to pay higher water bills and, while too early to say how much prices will rise, the increases could be significant.

"Potentially, we're talking about big bill increases," Ofwat director general Philip Fletcher told a news conference.

Britain privatised the water industry in 1989. Since then, bills have risen by 20 percent in real terms, helping firms such as United Utilities and Severn Trent upgrade outdated pipes and deliver cleaner drinking water.

Ofwat sets prices every five years for English and Welsh water and sewerage companies.

In the last price review, covering the period for 2000-2005, companies asked for an average 3.8 percent a year increase in bills, but Ofwat imposed a 12 percent price cut over the period, sending shares in water companies tumbling .............


This ought to be good news for water companies didn't it?

Over 32% drop???????????

Maybe a buying opportunity if we can find out why.