NORTH West Water customers will see their water bills fall by four per cent - an average of £9 - over the next five years.

But the reduction, announced by water watchdog Ofwat today, will be the smallest anywhere in the country because the company has to spend the most on environmental improvements.

North West Water, which has until January to decide whether to appeal against the price determination, said today a detailed review would be carried out before the decision was made.

Director general of water services, Ian Byatt, said the reduction was smaller than elsewhere in England and Wales, and smaller than he had proposed in July, because much of the £1billion national increase in spending on quality improvements was taking place in the North West.

That meant less of North West Water's efficiency savings could be passed onto customers through lower bills.

He said: "I set out to finance a large programme of environmental improvement within a framework of falling prices. This is what I have achieved."

Bills will drop by 9.3 per cent next year, but by 2004 they will have risen again.

Maurice Terry, chairman of the independent North West Customer Service Committee, welcomed the initial reduction.

But he added: "My committee is bitterly disappointed that the plan for environmental improvements set by government means that bills will rise again sharply at the end of the review period.

"Customers have told us that the drive for environmental improvements must be balanced with the need to ensure affordable and stable prices."

The gas industry regulator Ofgem today proposed a cut of five per cent to British Gas Trading's customers' bills.

That would mean a reduction of £12 to £14 a year for the average customer.

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