It's a rainier than average February; so why are the water companies talking again about crisis?

Water companies claimed yesterday that England will face a crisis of permanent drought unless they are allowed to boost resources and build new reservoirs and pipelines.

The Water Companies' Association claimed climate change and steadily rising demand from their customers meant that cutting mains leakage and persuading people to waste less water could not prevent a looming crisis and fundamental changes in lifestyles. Daily cut-offs for several hours would become common, and green lawns and car washing would be consigned to history.

But there was scepticism about the companies' claims. If the solutions they want are adopted, then customers' bills will rise to pay for the expensive new reservoirs. It will also leave companies selling more and more water, raising their turnover and profits.

The Environment Agency, the Government body which regulates rivers and water resources, said there was no case for starting work on major new water supplies immediately.

Ofwat, the industry's economic regulator, agreed, saying companies first had to do more work on restraining rising demand from their customers - and that included more metering.

``Water conservation delivers results more quickly, more economically and without the environmental risks ... of new water transfers and reservoirs,'' said Dr Geoff Mance, the agency's water management chief. Friends of the Earth called on the companies to invest in conservation measures.

Ray Tennant, chairman of the association which represents 17 of the smaller water companies in England and Wales, said without new supplies ``customers could have to accept hosepipe and sprinkler restrictions as normal practice every summer. We would have to restrict the number of new houses built each year ... customers may have to go without water for periods of the day. This may be common practice in less developed countries, but we are supposed to be one of the most advanced nations in the world".

Meteorological Office figures show there has been a run of dry years since 1989. But a spokesman said: ``We can't see any change in the climate. There are a little hiccups and this could well be one of them. It's far too early to say [that the climate has become drier].''

While last month had exceptionally low rainfall, this month is going to have above average. By yesterday the average quantity for the entire month had already fallen - and there is still a week of February left. This winter's overall rainfall looks like being pretty close to the average of the last 30 years.

Mr Tennant, managing director of South East Water and Mid Southern Water, said yesterday that he was convinced England's climate had become drier and the industry had to plan on the basis that this would continue or worsen. He said a growing number of households and increasing affluence meant more and more demand for water. People were also much less willing to tolerate shortages and restrictions under a privatised industry.

The water companies all planned to cut mains leakage and encourage their customers to use water less wastefully, which meant water meters for some. But those policies alone could not cope with the growing gap between limited supplies and rising demand.

In some areas, such as East and West Sussex, plans to build thousands of new homes should be dropped unless there were also plans for new water supplies. "There are no major rivers and all the water resources are already fully exploited.''

Mr Tennant said one major new reservoir was needed to serve Kent, Surrey and East and West Sussex, and another to serve East Anglia.

The Water Services Association, which represents nine of the big ten water companies, said it supported the line taken by the smaller companies but dissociated itself from talk of a looming crisis.

All the companies are trying to influence the public, politicians and the water regulators in the run up to the next water bill-setting exercise in 1999.

The companies have to draw up their investment plans for Ofwat, the industry's price-setting watchdog, covering the next decade by the end of 1998. Several want to include new resources in those plans and to be allowed to raise their customers' bills to pay for them.