OXFORDSHIRE’S water bills must not go up to fund a major “profit driven” sewage works in London, a probe has found.

The Selborne Commission said Thames Water’s £3.6bn plan to build a 20-mile pipe to stop sewage being pumped into the Thames in the capital could be delivered for just £1bn.

The water firm hatched a plan to pipe excess waste to five extended sewage treatment plants in London so that the Government can meet an EU directive which states 39 million tonnes of excess sewage going must stop going in the river each year.

But a commission set up by London councils said the EU directive can be met with a shorter tunnel combined with extra measures to stop rain water going into sewers, causing overflows.

Under Thames Water’s plans, the Commission says bills for all its customers would rise by at least £65.

Under the alternative plan, it says the rise would be limited to around £22.

Thames Water – which last night stood by its plan – said the average bill would rise by £52 a year.

The Selborne Commission, which investigated the plan, heard Thames Water would make £162m profit a year from the scheme.

Prof Colin Green said Thames Water can borrow money at about two per cent, but charge customers a rise of up to 4.5 per cent to pay it back.

He said: “There is a strong incentive to pour concrete, as for every pound Thames Water borrows to pay for large projects like sewers or reservoirs, they make a handsome return off their customers.”

Lord Selborne, who led the probe, said: “Many bill payers will be pushed into water poverty which is not acceptabled.”

Thames Water spokesman Nick Tennant said a shorter tunnel would only cut sewage at 15 out of 34 overflow points in London. He said it has already improved treatment works and water quality in the Thames through Oxfordshire.

It was too early to discuss allegations of profiteering, he added, as the Government has not decided how measures will be paid for and who will put them in place.