WATER REGULATOR Ofwat last week ordered Severn Trent Water to increase leak reduction targets by 2% after investigators confirmed that it was losing 175,000M litres more than it thought every day.
The move follows revelations last year that Severn Trent had overestimated the amount of water used by its customers.
'Leakage figures were higher than we had previously calculated as less water was reaching customers than we thought, but the total supplied remained the same, ' said a Severn Trent spokesman.
Ofwat sets water companies leakage reduction targets. These are based on what is termed 'economic levels of leakage'.
These levels acknowledge that reducing leaks further would be uneconomic and would be more expensive than producing water from other sources.
Following Severn Trent's discovery, Ofwat suspended the company's annual leakage targets and hired Halcrow Management Sciences to investigate the company's measurement methods.
The investigation confirmed that there were flaws in the way Severn was calculating leakage rates.
Until July 2003 Severn Trent reported leakage figures of 340M litres/day - the same as the Ofwat agreed economic leakage level. But the actual amount of water being lost was 515M litres/day .
The economic level of leakage for Severn Trent has now been set at 505M litres/day compared with a supply of 1.95bn litres/day.
Targets for other water companies include 445M litres/day for United Utilities which supplies 2bn litres/day of water per day, and 190M litres/day for Anglian Water which supplies 1.2bn litres/day.