Michael Meacher, the environment minister, said yesterday that thousands of abstraction licences, which allow large amounts of water to be taken without any regard to the environmental consequences, are to be scrapped.
The controversial licences are to be replaced by time-limited ones, while the companies rights' to compensation if a licence is revoked will also be stopped.
The water firms will be made liable for civil action for damages to rivers and wetlands that have been damaged by over-abstraction from 1 January 2000.
The changes, outlined in a consultation paper yesterday to be introduced through an Act of Parliament, were promised last year by Mr Meacher at the Government's much-vaunted Water Summit.
The announcement is in response to the recent very dry periods of 1989- 1992 and 1995-1997, when so much water was taken from some aquifers, or water tables, that whole rivers, such as the Darenth in Kent and the Ver in Hertfordshire, dried up. Even more substantial rivers like the Kennet in Berkshire ran dry at the top of their courses.
The Act is also aimed at securing the estimated 100-plus protected wildlife sites across England and Wales which are thought to be at risk through water abstraction.
It drew a warm welcome yesterday from the Environment Agency whose head of water resources, Dr Giles Phillips, said he "strongly supported" the thrust of the proposals.
The water companies took a much more frosty view and indicated that the Government was in for a fight, particularly over the ending of compensation. "It is the view of the companies that they must be compensated if they are forced to stop abstractions at particular sites," said Gordon Simmons, of Water UK, the industry's umbrella body. "The industry has invested millions of pounds in treatment and pipe networks tied to these licences, and it's not just a matter of turning a tap off.
"Aside from the assets becoming redundant, companies will need to invest in alternative facilities and locations to meet their statutory obligations to provide a water supply to their customers."
Announcing the proposals, Mr Meacher said that the present water abstraction licensing regime was set up in the 1960s when there was no knowledge of climate change and droughts were virtually unknown. "There is no doubt there was over-abstraction during the last drought, and in some rivers volume was reduced by up to a third, which meant that a large number of habitats on which wildlife depends were put at risk if not destroyed," he said.
The Government will frame a new Water Bill for which Mr Meacher hoped there would be legislative time in the current Parliament. He took a sanguine view of the water companies' likely response about the proposals to withdraw their compensation rights, which he agreed might amount to "many many millions" of pounds.
"I don't think anyone can believe that property rights should be continued into perpetuity irrespective of environmental damage," he said.
"I think the water companies are responsible. They do know the reasons why we are doing this.
"They know the need for conservation and leakage control and all that should reduce the pressure on them to increase abstractions."
Of the 48,000 abstraction licences in England and Wales, a large proportion are not time-limited. But though there have been powers to revoke them in case of environmental damage since 1963, they have never been used because of the fear that the resulting compensation would be enormous.Reuse content