Environmental campaigners say households should not be made to pay for the water companies’ ‘sewage scandal’ and want an inquiry into the companies, regulators and how the Government allowed this to happen.

Industry organisation Water UK said shareholders in water companies will initially fund the £10billion needed for the biggest modernisation of sewers “since the Victorian era” to reduce the amount of sewage overflowing into rivers and waterways.

The plans will cut the number of spills by up to 140,000 each year by 2030, compared with the level in 2020, it said.

But customers will eventually repay all of that money with gradual rises in their bills.

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It added that it could take between 50 to 100 years for the investment to be repaid and while all water companies will make improvements to their network, some of the upgrades will take several years.

Ash Smith, chair of Windrush Against Sewage Pollution (WASP), said there should be a public inquiry into the failures of regulators, water companies and the Government.

He said: “Every year, water company directors have been signing to say they had adequate funding from Ofwat to run the sewerage and water supply business.

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“Now it turns out they were extracting dividends of around  £72billion and ridiculous bonuses that undermined investment.

"But now they have been found out and the sewage scandal revealed, they want the billpayer to fund fixing it. But the billpayer has already paid."

He added: "We say that the money should come from the people who benefitted from the scam and that we need an inquiry to find out what went wrong and reclaim misappropriated funds.

"The regulators failed - that is perfectly clear - but the role of government in overseeing those regulators is the next scandal in waiting.

"What on earth were they thinking as they left captive billpayers as prey to predatory financial engineers - and continue to do so?"

He said Windrush Against Sewage Pollution has engaged experts in economics and accounting to add to its investigatory capabilities.

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A Thames Water spokesman said their shareholders have not taken a dividend for five years and a £1.6bn plan was recently announced, which sets out sewage treatment works which will take place over the next two years.

He said the public could also use their online map which provides "real time information about storm discharges" from 468 permitted locations and the improvements planned for more than 250 sites.

A Downing Street spokesman said the upgrades should not "disproportionately" affect consumer bills and that companies must put consumers above profits.