The Reading-based utility racked up £476m in pretax profits for the year to March, after raising household bills by 24%. Industry regulator Ofwat said the figures were "unacceptable", particularly as Thames Water has failed to meet its own targets to cut leaks.

A domestic hosepipe and sprinkler ban has been in force across the area since April, but the company's reputation has been marred by revelations that a third of supplies are lost through its ageing pipe network, along with images of water gushing out of the ground on West Berkshire's roads.

In its defence, Thames said that it had responded to 20% more repairs than the year before, and added that most of the problem was in London, where the 150-year-old pipeline is springing leaks due to the corrosive clay foundations of the city. It added that 2005 was the third driest year in a century.

Improvements to supplies are on the way, as Thames Water is planning a massive new reservoir at Steventon, between Wantage and Abingdon, to cope with rapid housebuilding rates in the region.