The problem has reached crisis point in the West Country where water tariffs have risen to pay for the clean up of the coast. Boarding houses have had to accept water meters because they are small businesses while neighbours who may have their houses in multiple occupation are overlooked.
Pat Dormer-Carter, who is selling her boarding house in Exmouth, Devon, because the business has become so difficult, said: 'Listening to the guests having a bath at night and then a shower again in the morning is hard for a proprietor who is charging only pounds 12.50 for bed and breakfast. That is the average rate, and heavy use of water takes away an appreciable part of the profit. It is one of the extra costs that is pushing the small person out of the tourist business.'
Mrs Dormer-Carter has a Victorian house with six paying bedrooms in an attractive part of Exmouth. In the last two and a half years several boarding houses on her street have gone out of business.
'Tourism in the West Country has been knocked hard. People aren't coming for such long stays any more. The Tourist Board is encouraging us to go en suite to compete with the continentals but it just means people use more water,' said Mrs Dormer-Carter.
New regulations have made the boarding house business more competitive than ever. Now any householder can take up to six paying guests without registering as a business, and so long as registration is avoided there is no need to have a water meter or comply with expensive fire regulations.
'We can't put prices up to pay for the extra cost of water. The business is too competitive. The water company is profiteering from privatisation - it is one of the worst things that has happened to this country. Soon there won't be a proper tourist industry left. Water meters are the last straw,' said Mrs Dormer-Carter.
South West Water, which supplies water and sewage disposal in Devon and Cornwall, is committed to spending pounds 900m on new plants to treat sewage which is at present discharged into the sea in raw form. Facilities now being built in Lyme Regis (West Dorset), Exmouth, Penzance, St Ives, Ilfracombe and 28 other locations will be finished by 1995. Larger schemes in Plymouth, Torbay and the Torridge estuary will take longer.
As a result of these schemes charges to customers have increased dramatically - more than doubling since privatisation. However South West Water also pays its investors a large dividend - larger than any other water company. This policy has led to its share price doubling since privatisation.
Neil Fishpool, director of the Campaign for Water Justice, said: 'South West Water is over-charging its customers in order to pay an excessive dividend and Ofwat, the water watchdog, has failed to do anything to control it. The company has invested pounds 26m in a Texas credit listing company and millions more on other diversification. Instead of taking risks with money raised in the South West it should be keeping costs down and giving its customers better value.'
Eileen Wragg, another Exmouth landlady who has stopped trading, said: 'Our water bill came to pounds 440 a year - twice that of neighbors who did not have a meter even though they had more people in their household. The neighbours can use as much water as they like - if they want to they can hose down the back lane and it won't cost them any more. But we have to worry every time we flush the toilet.'