Water bills will fall marginally over the next five years, under new proposals published today by the UK's water watchdog.

Regulator Ofwat said the average bill in England and Wales would be around £340 by 2015 before inflation is added on - a £3 fall from current levels.

However the proposals fall far short of previous expectations. In July, Ofwat said the average household water and sewerage bill would drop by 4% between 2010 and 2015, before inflation.

This would have taken the average bill down to £330 by 2015.

Water companies, meanwhile, had originally asked for new pricing levels around 10% - or £34 - above the levels agreed today.

The Consumer Council for Water said today that Ofwat had been 'arguably unrealistic' with its previous proposals, when it suggested bills would come down by £14.

It added Ofwat had left out some important elements of customers’ priorities such as reducing the risk of sewer flooding, maintaining pipes, sewers and treatment works, and securing safe, reliable water for the future. The Council said these improvements could have been made while still allowing price reductions.

The Council added: 'In its final decision, Ofwat has included many of these customer priorities but it has also significantly eased the pressure on water companies to be more efficient – meaning that some customers will face higher bills than they are willing to pay.'