HOUSEHOLDERS in the region are facing rises in water bills by as much as 38 per cent, the industry regulator has revealed.

A report by Ofwat has shown that Northumbrian Water customers can expect their average household bills to increase by 30 per cent or more between 2005 and 2010.

The company, which serves more than 2.5 million customers from Teesside to the Scottish Borders, may also increase sewerage bills by as much as 50 per cent.

The report follows an analysis of draft business plans submitted by water companies in England and Wales.

Water UK, which represents the 22 water companies in England and Wales, announced in August that £21bn was needed between 2005 and 2010 to pay for capital investment.

The improvement work would affect customer bills and lead to substantial price rises, Ofwat said.

It predicted the current average annual household water bill of £234 would rise to £306 by 2010.

A spokesperson said: "North-umbrian Water is committed to the long term provision of the highest standards of water and sewerage services.

"The draft business plan will allow us to deliver the required water supply and environmental quality improvements, tackle instances of discoloured water, reduce flooding from sewers and enable us to continue to provide excellent levels of service."

Ofwat will study final business plans from the water companies next April, before issuing draft price limits in July.

A final decision will be made in November and take effect in April 2005.

In Yorkshire, water bills are estimated to increase by between 20 and 29 per cent and sewerage bills by 20 per cent.