The Government set out plans yesterday to reform the water industry, claiming that opening up the sector would save the economy £2bn over 30 years,
In a draft water Bill, ministers proposed removing regulations that act as a barrier to companies wishing to enter the water and sewage markets.
The Department for Environment, Food and Rural Affairs also proposed reforms to the special merger regime imposed on the sector, which limits companies' ability to merge or be taken over by more efficient competitors.
Under the proposals, all businesses and public-sector bodies in England will be able to switch their water and sewage companies, allowing them to obtain more competitive prices.
The Secretary of State for Environment, Caroline Spelman, said: "By slashing red tape we will stimulate a market for new water resources and incentivise more water recycling."