Campaigners have reacted with fury to a deal for water companies which they claim will continue “profit for pollution” of rivers and seas.

Regulator Ofwat has announced household bills in England and Wales will rise by an average £31 a year over the next five years, before inflation, as firms are given the go-ahead for £104 billion upgrade of the water sector which it said would deliver improvements for customers and environment.

But environmentalists warned the bill hikes would not solve the sewage crisis or guarantee cleaner water.

The investment package includes £12 billion on 2,884 projects to reduce sewage spills from storm overflows by 45% on 2021 levels, such as greater storage and green schemes.