Water firms to claim millions over rivers

Water companies are demanding hundreds of millions of pounds from the taxpayer in return for stopping taking water from the UK's drought-stricken rivers.

Some 39 rivers face serious problems as they become what the Environment Agency (EA) calls "over-abstracted". Put simply, too much water is being taken out of them. The water companies are allowed to take huge amounts of water out of rivers for nothing, under agreements made 40 years ago, long before climate change led to repeated drought warnings.

Southern Water last year took 30 per cent of Hampshire's river Test. In August when the river was at its very lowest, the company increased its take to about 40 per cent.

If the EA wants the companies to stop taking water, the utilities are legally entitled to demand compensation from the taxpayer if they have to spend money finding alternative sources.

Water industry figures now say they will demand £2m for each million litres they are banned from taking. A spokesman for the water regulator Ofwat said: "The figure of £1m to £2m is what is being discussed."