Pollution watchdog has bark worse than its bite urged to

Last year the biggest fine the Government's pounds 500m-a-year Environment Agency won from a prosecution was pounds 175,000. In the dock was Severn Trent Water, the second- largest water utility, which killed 35,000 fish in a river in Mid-Wales - its 42nd pollution offence since privatisation in 1989.

It was "the equivalent of a pounds 15 fine on someone earning pounds 30,000 a year", Ed Gallagher, the agency's chief executive, said yesterday. He told the organisation's first annual meeting that big companies can shrug off the little fines they receive for major pollution offences. "These fines are really small change to these companies - they send the wrong signal to the boardroom and the public." He got a sympathetic hearing from the environment minister, Michael Meacher, who attended the meeting of "stakeholders" in London. "The fines are too low and the average is very small," he said. Now he was talking to other ministers about ways of raising the penalties.

Magistrates courts can impose a maximum for a pollution offence of pounds 6,000, while in the Crown Court there is no limit. The agency does not want these maxima changed; it just wishes magistrates and judges would use their discretion to push the general level of fines upwards. It also wants the Government to press ahead with plans for a tax on water pollution, announced rather tentatively in Chancellor Gordon Brown's first Budget. The more consented, legally authorised pollution a company produces the more it should pay, argued Mr Gallagher. And if it breaches its consents it should also have to pay extra, even if it was not taken to court and prosecuted. "The polluter pays principle is one of the few things everyone can agree on," he said.

Friends of the Earth protesters (above) demonstrated outside the meeting, claiming the agency had too cosy a relationship with industry and did not prosecute companies which breached their consents to pollute often enough.

But the pressure group welcomed the call for stiffer fines.

The agency has also decided that any member of staff, any board member and any chair person of one of its numerous advisory committees belonging to a secret society should declare it.

The move follows as yet unsubstantiated suggestions that Freemasons among its officers may be favouring companies it regulates in which senior managers are Masons. Some local councils already have this policy.