WATER watchdogs have warned that cost-cutting within North West Water could be at the expense of more improvements in service.

Ofwat carried out an inquiry into NWW and two other privatised companies over concerns that they were falling short in a number of areas.

Although Ofwat said it recognised NWW had improved its service in various areas, it stressed the company still "has some way to go to rank among the best performers in the industry".

Ian Byatt, of Ofwat, said: "Although the company's services have improved since privatisation overall, its services to customers do not match those of some other companies."

Ofwat's findings included :

Drinking water quality standards had been met

Leakage levels remain high but the company had broadly met improvement forecasts set in 1989.

Efforts to reduce the number of customers at risk from low water pressure was producing results.

NWW, under fire since its takeover of Norweb, today said it was surprised at Ofwat's comments on service quality and performance.

Brian Staples, chief executive of the new United Utilities water and electricity giant, said: "The customer interest comes at the very top of our agenda.

"We can assure the Director General that while we continue our drive for cost savings, this will not impact on our commitment to provide the resources needed to deliver still higher quality of service."

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