MID Kent Water customers face higher bills next year after the industry regulator Ofwat approved a 15 per cent rise over five years.

Under the ruling, bills will go up on average by 3.3 per cent a year between 2005 and 2010.

But the Snodland-based utility, which has just been put up for sale, has a right to appeal against Ofwat's so-called "determination" if bosses believe the increase is not large enough. Mid Kent has until February to decide whether the rise is big enough to fund its investment plans.

Ofwat backed £105m capital spending programme by Mid Kent, largely to meet the demands of population growth in the county. Kent's population is forecast to increase by 29 per cent over the next 25 years.

Kent is also one of the driest regions in the UK and faces a range of development and environmental pressures.

In a statement, Mid Kent - which is run by the Swan Group, a subsidiary of German bank West LB - said it was essential for prices to be set at a level that ensured services were not put at risk and that drinking water quality was maintained.

Managing director Paul Butler said: "Mid Kent Water has sought throughout this process to secure a result which strikes a suitable balance between keeping customers bills as low as possible whilst ensuring service levels to customers can be maintained.

"We are pleased that the determination has gone a considerable way to meet this imperative."