THAMES WATER'S ambitious Tideway tunnel is among the projects that will swell its investment programme by £121M next year, the firm said this week.
Other projects include the ongoing replacement of London's Victorian water mains and the upgrade of key sewage treatment works.
The firm spent £779.4M upgrading assets last year, and this will rise to £900M a year from this year.
Up to £50M of the extra spend will be spent on upgrading London's mains as part of the £150M extra spending water industry regulator Ofwat ordered Thames to cut leaks.
Thames installed 323km of new water mains during 2006/07, 59km ahead of Ofwat's target for the year. It intends to replace 560km of mains next year.
The rest of the extra spend will be spread across projects such as the upgrade of sewage treatment works at Beckton, Crossness and Mogden and on planning for the £2bn crossLondon Tideway tunnel.
Thames Water's annual results released last week showed a 22% fall in pretax prot from £346M to £270M. This was due to extra money spent on mains replacement.
Thames Water chief executive David Owens said: 'The financial results reflect the combined challenges of the drought and increased efforts to address leakage.'