Ofwat has set out in greater detail its reasons for proposing in September 2007 to fine Thames Water a total of £12.5 million and further extended the consultation period.

The economic regulator has issued a 'variation notice' as an open, robust and transparent response to initial consultation which followed its original proposal to fine the company.

Ofwat proposed the penalty because Thames' reporting systems were inadequate. Neglect and low business priority on reporting non-financial data led to the company failing to provide robust information. This had damaged the regulatory process, requiring a substantial fine.

There will now be a further consultation period on the variation notice which will run until 6 February after which Ofwat will make its final decision. Ofwat anounced its intention to fine Thames Water on 28 September 2007. The level of the proposed fine currently remains unchanged and breaks down as follows:·  £11.1million (0.8% of 2006-07 turnover) for failing to provide accurate information.

·  £1.4 million (0.1% of 2005-2006 turnover) for providing sub-standard services to customers by failing to meet Guaranteed Standards of Service (GSS).

Copies of the proposed variations are available from the Ofwat website.