The revelation in yesterday's annual report by the Department of the Environment's drinking water inspectorate will intensify the debate over rising water bills. Getting rid of these chemicals, known as polycyclic aromatic hydrocarbons or PAHs, is extremely expensive. Old cast-iron mains lined with coal tar paper have to be replaced.
Thames Water has the biggest PAH problem of the 10 large water utilities, with 84 of its 229 supply zones affected. Southern, Wessex and South West also have more than a fifth of zones failing to meet the standard.
The water companies investment programme for drinking water - pounds 4bn spent in the past four years - should allow most of the EC's legal standards to be met within the next few years, but not the PAH standard. Some PAHs have been shown to be carcinogenic in tests on animals.
Out of 2,598 of the water supply zones in England and Wales, 224 last year had tap-water with higher PAH concentrations than the EC limit.
The number of zones not complying with the EC standard has more than doubled since 1990. This is partly due to better analytical work in water company laboratories, but it is also due to the deterioration of coal tar linings in more than 100,000 miles of older water mains. These mains are not due to be entirely replaced until far into the next century.
Mike Healey, the inspectorate's chief, said there was no health risk. The EC limit was very cautious.
The Government will either have to allow the water companies to charge their customers still higher bills to deal with PAHs, or allow them to continue breaching the standard and risk prosecution by Brussels. The third option is to try to change the Drinking Water Directive, which is likely to take years of negotiation.
Mr Healey said drinking water was of 'very high quality' with 98.7 per cent of more than 3 million individual tests done last year by the water companies meeting EC and UK standards. There had been an overall improvement on 1990 and 1991.
Thames Water has the worst record on pesticides in tap-water with 184 of its 229 supply zones failing to meet the EC's tough standard.
Friends of the Earth said water reaching 14.5 million people in England and Wales regularly failed to meet the EC pesticide standard, while 3.3 million customers received water with nitrates above the EC limit.