Water bills in Brighton and Hove could rise at almost three times the rate of inflation as Southern Water pumps £1.8 billion into improvements.

The increase would send the average household bill of £249.88 rocketing by 7.2 per cent a year from 2005.

By 2010, householders would be paying an extra £88 a year on top of inflation.

Managers say the charge will help meet the cost of improving water supplies as well as wastewater treatment works, pumping stations and sewers.

In its five-year draft business plan, published today, Southern Water calculates it will spend the equivalent of £1,000 on each customer.

Half the £1,800 million will be used to bring the service up to new EU standards.

But Southern Water has not included the costs of meeting recommendations by the Environment Agency which have yet to become law. The company says they would cost an extra £1,000 million.

The company's draft business plan is now being considered by industry regulator Ofwat.

Southern Water managing director Stuart Derwent said: "Since 1990 we have invested approaching £3,000 million to dramatically improve service levels and environmental quality.

"If this is to continue, water charges have to rise to meet the enormous cost."

Southern Water's proposals are:

A £784 million programme of improvement schemes to meet higher quality standards required by the Environment Agency and Drinking Water Inspectorate
Spending £696 million to maintain and improve mains, sewers, treatment works and pumping stations
Upgrading levels of service at a cost of £105 million
The provision of £213 million worth of additional water and sewerage infrastructure to start meeting plans for new housing.

A final decision on Southern Water's business plan will be made next year when the industry regulator Ofwat sets the level of water charges from 2005 to 2010.

Customers can obtain a copy of the plan or comment on it by writing to Southern Water, Southern House, Yeoman Road, Durrington BN13 3NX.