Water industry comes under fire as 3.6 billion litres are lost every day

Billions of litres of water are gushing out of Britain's crumbling mains network every day as the country faces its worst drought for 100 years.

Figures from Ofwat, the water regulator, reveal that the privatised water companies are losing 3.6 billion litres a day - up to 500 pints per home per day. The worst offender, Thames Water, loses 915 million litres a day, equivalent to more than 700 swimming pools.

The industry's record on leaks came under attack from business and consumer groups as Thames said there was a "strong possibility" it would apply for a drought order on Friday. If granted, the emergency powers would halt car washes, ban the watering of public parks and the filling of private swimming pools and threaten the survival of thousands of small businesses such as window cleaners and gardeners.

Following two successive dry winters, the Environment Agency has warned the drought is spreading, with eastern England and the south Midlands judged to be vulnerable in the event of a hot, dry summer. Reservoir levels in Wales and the South-west could drop sharply this summer.

Department for Environment officials have admitted they do not know how many reservoirs have closed in the past 15 years.

MPs said the failure of the department to answer the question indicated they had not been taking water shortages seriously in spite of the rising demands for housing in the South-east.

On Monday this week, ministers granted Sutton and East Surrey Water the first drought order for more than a decade, a dramatic escalation of the hosepipe bans already in force across the South-east. With the Environment Agency warning that having standpipes in streets in the parched South is a "real risk", the Mayor of London yesterday urged people to rethink the way in which they use water. Ken Livingstone said it was inevitable that homes would have to be fitted with water meters.

The Consumer Council for Water, a watchdog, backed the introduction of compulsory metering in the worst-affected areas of the South-east, but a spokesman said the water industry had to improve its performance on leaks to ensure supplies reached customers. According to the latest figures from Ofwat, for 2004-05, the 23 water companies in England and Wales lost between eight million and 915 million litres a day. Two companies, Thames Water and United Utilities - which together cover 11 million people in London, Manchester and Liverpool - failed to hit Ofwat's targets for the number of leaks that can be economically repaired. Thames Water - which loses one-third of its water between the reservoir and the home - has missed its target for five successive years.

Andrew Marsh, of the Consumer Council for Water, said: "We have all got to do our bit but the companies ... have to do theirs as well. The companies - and Thames Water in particular - need to sharpen up their act if we are going to save water resources."

Alan Bradley, a cabinet member at Westminster Council, complained: "It is a bit galling to have hosepipe bans and standpipes when Thames Water are losing that amount ... through leakages. They have been set a target by Ofwat to reduce the amount they lose and they consistently fail to meet those targets."

The Federation of Small Businesses demanded the industry fix the problem. Thames Water defended its leakage record, saying it was hampered by the age of pipes, the region's clay soil and heavy traffic. This week its parent company, RWE, said operating profit rose 17 per cent in the first quarter - a rise likely to irritate consumers and business people hurt by the drought.

Pressure on the industry is expected to increase further as water companies and ministers are accused of failing to heed calls to improve supplies when climate change threatens to bring more drought.

Plans for a national water pipe supplying water from the North to the dry South are still on the drawing board more than 20 years after being suggested.

The Met Office warned there could be heavy rain in the West and South over the next three days, but said it would take a prolonged period of very wet weather to replenish stocks.

Running out

* One-third of the water in homes goes on flushing the lavatory - each flush uses about 10 litres (18 pints)

* The average bath uses 80 litres; a shower about 35 litres

* Garden sprinklers use up to 1,000 litres an hour

* The water industry loses 800 million gallons a day in leaks, enough to meet the needs of 24 million people a day

* The worst offender is Thames Water, which loses 200 million gallons daily

* Groundwater, used for 70 per cent of supplies in the South- east, is at record lows

* Standpipes were last used in Britain in 1976

* 2005 was the driest year since 1973