SWAN Group, which owns Mid Kent Water, is pressing the Government to make it easier for regional water companies to merge.

The group launched its campaign at a House of Commons reception hosted by Chatham and Aylesford MP, Jonathan Shaw.

Chief executive, Keith Tozzi, said: "We are very keen to see the bringing about of consolidation of water companies in the southern half of England and there are some political and regulatory hurdles in the way."

Possible regional targets bordering Mid Kent Water's area include Folkestone and Dover Water Company - owned by French utilities giant Vivendi - and South East Water, owned by the French Bouyges group.

Mr Tozzi said that water company mergers would reduce overheads and bring real benefits to customers, possibly leading to lower bills.

"Each has a board, headquarters, a billing system, a call centre. It would make sense to put some of these together. You could then take costs out and share the savings with the customer."

He wanted to see the rules changed to make it easier to progress possible mergers with other local companies.

"For any water company to merge with another, there is automatic referral to the Competition Commission if the market value of the company is over £30million.

"Whilst we're not frightened of going to the Competition Commission, it's quite difficult from a business deal point of view." He would like to see a lifting of the £30m ceiling.

He dismissed fears that further consolidation would threaten jobs at Snodland - the home of Mid Kent Water - and elsewhere in the county. Employees would be moved to other parts of the group, he said.

Mr Shaw said: "First and foremost, my concern would be for my constituents. I have serious concerns about any job losses."

Swan Group is a private company backed by the German bank WestLB. The group includes Mid Kent Water, Eclipse Scientific Group, Halcrow Water Services, and Inenco, an energy consulting group.