Ofwat, the water industry watchdog, is calling for compensation for customers affected by falling standards of service during the hot spell. The regulator wants companies to come forward voluntarily but may also seek to have compensation enshrined in the industry's Guaranteed Standards Scheme.
A spokeswoman for Ofwat said that the idea is in the early stages, but could cover loss of water pressure as well as the introduction of standpipes - which is becoming increasingly likely in parts of Yorkshire as the drought continues.
Hundreds of thousands of customers were left without water for several hours earlier in the summer, as others turned on their hosepipes, causing huge surges in demand.
Ofwat stressed that it would not cover hosepipe bans, adding that customers "ought to pay" when they use excessive amounts of water.
The compensation could cost the industry millions of pounds. At present, companies have to pay in some cases of unacceptable interruption in supply, but there is no cover for use of standpipes. The introduction of new compensation would need Government approval.
Ofwat also attacked the companies for failing to manage their resources. The spokeswoman said: "We are not taking about short term fixes. Over the last few years if companies had spent more on leakage then the water might have lasted a few more weeks." Leakage from pipelines in North West Water and Yorkshire Water's regions is 30 per cent or more, and they are among the companies worst hit by the drought.
The water industry in England and Wales has invested pounds 15bn since privatisation in 1989 and is to invest a further pounds 14bn by the end of the decade under the regulatory regime. About one-fifth of investment so far has been on water distribution.
The risk of moorland and grass fires mounted as the long dry spell continued with no promise of any rain last night. Five fire crews and 20 Peak District rangers were last night dousing burning peat and heather on Derwent moors, west of Sheffield.
A helicopter ferried water supplies from a nearby reservoir, but drifting smoke forced the closure of the A57 Sheffield-Manchester route. The moorland is a site of special scientific interest and Peak District National Park officials said they feared hares, and fledgling merlin, skylarks and meadow pippits may have died in the flames.
In the border counties of England and Wales helicopter patrols are to be mounted to ensure that farmers comply with a ban on pumping water from the River Wye from today. Fines of up to pounds 20,000 are possible.
National Rivers Authority officers will support the day-time air operation with night monitoring. The restrictions will remain until 30 September unless there is sufficient rain.
Yesterday, William Courtney, chairman of Southern Water, revealed at the company's annual meeting in Brighton that the garden at his home in Weybridge, Surrey, which is supplied by a French-owned water company, was parched.
Mr Courtney, facing questions about company profits and a hosepipe ban on 200,000 householders in Sussex, told shareholders that he felt sorry for gardeners but said he too had "a lawn like concrete and roses with no leaves".
Southern Water's hosepipe ban was due to excessive demand, he said.
Southern Water has made a pre-tax profit of pounds 143.4m, but Mr Courtney said the company would not be giving money back to customers.Reuse content