by business editor Trevor Sturgess

Water bills for hard-pressed Kent and Medway customers are set to fall following a watchdog report.

Ofwat says water companies across the country, including South East Water and Southern Water, will not be able to charge as much as they hoped between 2010 and 2015. A typical annual bill could fall by around £14 to £330.

Under the proposals, water companies will be allowed to invest £21bn in the water supply infrastructure over the next five years.

Ofwat’s bill-cutting proposal follows what many experts claim was an over-generous settlement to companies in the prevous round.

But companies have warned that lower revenues could cut investment levels, which would affect customers.

A consultation period starts now, with a final decision on prices and investment expected in November.

"People can shop around for the best deal on many things, but not water," said Ofwat chief executive Regina Finn. "That’s why we’ve challenged the companies’ plans rigorously to ensure that customers get the best value for money.

"We understand times are hard and we have listened to what customers have told us. They want safe, reliable water supply at a reasonable cost."