Leakage across England and Wales has been cut by 5 per cent in the past 13 years.
Southern Water, which had to repay £5 million to customers after missing its 2010/11 leakage target, can allow leakage to increase by 6 per cent by 2015. Its targets were “reprofiled” after two cold winters caused record rates of pipe bursts.
Tony Smith, chief executive of the Consumer Council for Water, said Ofwat needed to recognise the public perception water firms were not doing enough.
A government spokesperson said leakage targets were to be reviewed in light of the drought.