WESSEX Water is coming up to scratch in terms of water quality and overall service but customers still face the prospect of rocketing bills this year.

The warning comes as Wessex Water unveiled its annual results up to March 31, in which watchdog OFWAT places the firm's standard of service at close to 100 per cent.

Bosses say the pace of environmental improvements demanded by the Government will cause bills to soar.

Chairman Colin Skellett said the firm's business plan changed considerably after guidance from ministers.

"In our draft business plan we had proposed levels of expenditure and environmental improvements that would have required only modest increase in bills," he said.

"The final plan contains a much higher level of environmental investment as stipulated by the Government and that will lead to considerably higher bills for customers."

Wessex Water, owned by YTL, recorded profits of £59m for the last financial year, a drop of £8.5m on last year's figure.

Turnover increased by £19.2m but operating costs also soared to £88.5m up £4.5m on last year.

The increase is attributed to the extra costs of meeting new standards and inflation, but efficiency savings of £1.5m offset the rise.

Safeguarding public health, maintaining customer expectations and delivering returns to investors are among the company's key objectives listed in its five-year investment plan.