Water chief quits as firm faces a second inquiry

The Government's Drinking Water Inspectorate is to investigate South West Water after contamination at a major treatment works last summer caused nearly 600 people to fall ill.

It is the second time in the past few years that the Littlehempston Treatment Works, serving more than 300,000 residents and summer visitors in south Devon, has been linked with a sickness and diarrhoea outbreak caused by the microscopic parasite cryptosporidium.

An official report into the incident, which occurred at the height of the holiday season, was published yesterday.

South West Water also announced that Bill Fraser, its managing director since privatisation, is to leave at the end of next month. But a spokesman said that there was ''absolutely no connection'' between his departure from the water company with the highest bills in the country and the publication of yesterday's report. However, Mr Fraser, whose salary has risen rapidly to pounds 164,000 a year, will remain a paid consultant for the company for a year with an undisclosed fee.

In yesterday's report the "outbreak control team" - a group of public health officials, local council officers and water company managers - put the blame squarely on the Littlehempston works, but failed to establish how the parasite got into the treated water in the first place.

There are growing concerns about cryptosporidium, which can live in the guts of farm animals as well as man and is widespread in the environment. It is extremely hardy and, being about 10 times the size of a bacterium, is small enough to get through extremely fine filters. It can cause weeks of painful gut illness and once an outbreak occurs it can spread from person to person directly.

Earlier this month, Yorkshire Water went on "red alert" after the parasite was found in the treated water at one of its largest works - the Elvington plant which supplies Sheffield, Rotherham and Barnsley. But it was found at very low concentrations and there were no reported cases of sickness.

There have been several outbreaks linked to tap water in the past few years, but the Drinking Water Inspectorate has not yet taken any water company to court. Yesterday a spokeswoman said prosecuting South West Water was a possibility.

Following the outbreak, the control team told local residents to boil water for 26 days. The company paid pounds 15 compensation to all households in the area, which cost more than pounds 1m, but some individuals and companies are seeking further compensation.