WATER bills in Fareham and Gosport are to rise by nearly four per cent next year as Portsmouth Water plans to invest £55m over five years.

The water supply company has submitted a five-year business plan, until 2010, which would see bills rise by 3.7 per cent each year.

By 2010 the water bill for an average household in the area will be £88 a year, equivalent to 24p a day.

The plan has been submitted to the industry's financial regulator Ofwat for consideration.

Portsmouth Water's managing director Nick Roadnight said the increases were necessary to maintain and improve the security of drinking water supplies.

"While we have the lowest water supply charges in England and Wales, we still need to invest to maintain our high standards," he said.

"We have proposed a programme which will deliver pragmatic cost-effective solutions with only a modest increase in bills."

Ministerial advice, issued in March, urged companies to make continued improvements in drinking water quality and the environment while taking account of the effects on customer bills.

Included in the plan are schemes to protect a number of environmental sites, identified by English Nature and the Environment Agency, which they cannot be sure are not adversely affected by water supply abstractions.

Proposed measures include:

Water quality improvements to minimise cryptosporidium and nitrates in drinking water.

Continued investment in replacing old mains to reduce supply interruptions and leakage.

Development of a winter storage reservoir at Havant Thicket to meet future demands.

Providing customer service improvements to help those who have difficulty paying their bills.

Mr Roadnight added: "The company now abstracts 20 per cent less water than it did twenty years ago, and we have just agreed in the last year a further five per cent reduction in our abstraction capabilities in the Meon and Hamble Valleys to protect the local environment."

Ofwat will publish its draft decision on the future level of water charges in August and a final decision will be published in December.