Water companies are being urged to scrap their planned price hikes for consumers and ease the pressure on householders’ finances.

In a letter to the CEOs of all major water firms, Environment Secretary Owen Paterson (pictured) is calling on them to “look closely” at whether price increases are necessary and to introduce special tariffs for hard-pressed householders.

Water firms need permission to raise prices beyond limits set by regulator Ofwat for five-year periods. Ofwat has asked them to think about whether they really need to bring in full price increases next year that were allowed for in the last price review in 2009.

The companies have blamed the price increases on the costs of environmental improvements including replacing ageing water pipes.

Mr Paterson said: “We know that household budgets are under pressure and keeping water bills affordable is a crucial way we can help hardworking people.

“That is why we are pressing hard to make sure customers get a fair deal by encouraging water companies to look closely at any price increases, introduce social tariffs for vulnerable customers and crackdown on bad debt.”

Since 2009, average rises in water and sewerage bills have been in line with inflation and are little more than a pound a day but this “has still substantially outstripped increases” in household income, he added.

Last month Ofwat rejected Thames Water’s proposal to add £29 to customers’ bills next year, which currently stands at £354 a year.